Economics

RBNZ Foils Rate-Cut Bets Even as It Pushes Out Forecast for Hike

Orr reintroduces comment that next move could be up or down
Inflation not seen reaching target midpoint until late 2020

The RBNZ has kept interest rates on hold and says the next move may be up or down. Bloomberg’s Enda Curran reports.(Source: Bloomberg)

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By Tracy Withers and Matthew Brockett

February 13, 2019 at 1:05 AM UTC

Updated on

February 13, 2019 at 4:31 AM UTC

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New Zealand’s central bank pushed out its forecast for an interest-rate increase to early 2021, disappointing investors looking for signs of a policy easing later this year and sending the currency surging.

Reserve Bank Governor Adrian Orr left the official cash rate at 1.75 percent Wednesday in Wellington and said he expects to keep it there “through 2019 and 2020” as subdued inflation continues to warrant supportive policy. However, the chances of a rate reduction haven’t increased, he said.