The Reserve Bank of New Zealand (RBNZ) Governor Adrian Orr said on Wednesday that they were surprised by GDP data last week indicating the economy shrank, but has no opinion yet on what it means for the interest rate outlook, per Bloomberg.
Key quotes
“The data was surprisingly subdued.”
“We are internalizing that complex situation and will be back in February with our monetary policy statement.”
“We have been surprised by the continued extremely high level net inward migration,”
“I can’t overemphasize enough that it’s core inflation that’s going to be our challenge ahead,” he said. “So much of that stuff is sitting within central and local government from rates, tax, whatever. The last five yards on the inflation battle is going to be tough.”
“There’s still a long way to go, particularly with the level of core inflation, or homegrown inflation, remaining too high,”
Market reaction
NZD/USD extends its rally following Orr’s comments. The pair is currently trading at 0.6271, up 0.08% on the day.
Read the full article here