Sharechat Logo

Bollard may give upbeat assessment of NZ in speech this week

Monday 13th February 2012

Text too small?

Reserve Bank of New Zealand Governor Allan Bollard may give an upbeat view of the economy this week in a speech to a Trans-Tasman Business Circle luncheon titled, “Could We Be Better off than We Think?”

The title of the Friday speech was confirmed by a central bank spokesman.

“The title certainly hints at a counter-weight to the barrage of negatively tinged reads we’ve become accustomed to over recent months, as the world looked a bit wobbly,” said Doug Steel, economist at the Bank of New Zealand, in a note.

The speech will be Bollard’s second this year, after he last month told a Canterbury business audience New Zealand’s financial system had weathered both Europe’s deepening debt woes and the Christchurch earthquakes.

He also flagged the Canterbury rebuild and rising bank funding costs as pressures on future monetary policy decisions.

Bollard left the official cash rate unchanged at the historically low 2.5 percent at last month’s review. BNZ economists predict the Reserve Bank will begin to hike rates later in the year, with the OCR gradually moving back up to 4.25 percent by the end of 2013.

In the central bank’s December Monetary Policy statement, Bollard forecast economic growth will accelerate to a 0.7 percent pace in the first quarter, and expanding at 0.8 percent in the second two quarters as the Christchurch rebuild takes off.

Last week, the Reserve Bank of Australian left is cash rate unchanged at 4.25 percent following a cut of 25 basis points each in November and December, and surprising analysts who wire picking more easing.

“The RBNZ Governor is no doubt looking at very similar things that persuaded the RBA to sit back last week,” Steel said. “Even so, we doubt it will be enough to kick domestic short end rates out of their domestic ranges.”

Traders are betting Bollard will hike the benchmark interest rate 10 basis points over the coming year, according to the Overnight Index Swap curve.

Last month, Bollard announced he will stand down as governor when his term finished in September. He was appointed as governor in September 2002.

(BusinessDesk)

BusinessDesk.co.nz



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

Broader review powers eyed for Climate Change Commission
MARKET CLOSE: NZ shares edge lower as global ructions weigh; Tourism Holdings sinks
NZ dollar rises as markets bet on US interest rate cut
Fonterra seeks further changes to dairy act
Tilt, Oji say transmission changes may discourage new generation
Tourism Holdings shares fall to 6-week low as US margins shrink
Venture capitalists split on govt picking winners
21st October 2019 Morning Report
Kiwi dollar steady as markets await Brexit developments
Domestic AGMs, multi-national earnings to provide economic insights

IRG See IRG research reports