On August 14th (Wednesday) at 10:00 Beijing time, the Reserve Bank of New Zealand will hold an interest rate decision. The latest news states that there are differences of opinions among the shadow committee of the Reserve Bank of New Zealand on whether to cut interest rates. It is worth noting that a majority of people recommend that the Reserve Bank of New Zealand cut interest rates by 25 basis points this week. The consideration behind this decision is closely related to the current situation and may have an important impact on New Zealand's monetary policy direction.
The New Zealand Institute of Economic Research (NZIER) has a "shadow committee" made up of analysts. The shadow committee is independent of the Reserve Bank of New Zealand, does not represent what the Reserve Bank of New Zealand will do, but rather represents what they think the Reserve Bank of New Zealand should do. This means that the "shadow committee" does not rehearse what they think will happen, but rather what they think should happen.
The key points of the "shadow committee" report are as follows:
There are differences of opinions among the shadow committee of the New Zealand Institute of Economic Research on whether the Reserve Bank of New Zealand should lower interest rates in the August monetary policy statement;
More than half of the shadow committee members believe that considering the continued slowdown of the New Zealand economy and labor market, as well as CPI inflation close to the 1% to 3% inflation target range, interest rates need to be cut by 25 basis points now;
Other members suggest that the Reserve Bank of New Zealand should maintain interest rates at 5.50%;
One member believes that there is still not enough evidence from economic data indicators to prove that cutting interest rates now is reasonable.
In summary, if the Reserve Bank of New Zealand decides to cut interest rates by 25 basis points this week as most shadow committee members expect, it may weigh on the New Zealand dollar against the U.S. dollar.
Daily chart of the New Zealand dollar against the US dollar.
On August 12th at 14:13 Beijing time, the New Zealand dollar against the U.S. dollar was reported at 0.6012/13.