Reserve Bank expects to start OCR upwards adjustment “soon”.

The Reserve Bank today left the Official Cash Rate unchanged at 2.5 percent.

Within this mornings announcement was the following…”While headline inflation has been moderate, inflationary pressures are expected to increase over the next two years. In this environment, there is a need to return interest rates to more-normal levels. The Bank expects to start this adjustment soon”.

While it seems clear the first raise in the OCR is now close, one could also read the Reserve Bank is in no great hurry to rapidly raise the cash rate if “inflationary pressures” are to be measured over a period of 2 years..

NZ$ down 3/4 of a cent this morning on traders who had bet on a possible rate rise this morning clearing out of the way..

Go The Black Caps 🙂