Reuters reported that the Reserve Bank of New Zealand's chief economist Paul Conway said on Monday the central bank's current rate track was their "best foot forward on their current view" but it could change depending on economic indicators.
"If we get six weeks or 12 weeks down the track and the place is cooling a bit more quickly than anticipated… we get to play the game again," he said in an interview with Reuters.
''He added, however, the monetary policy committee was really cognizant of the risks around inflation expectations getting away from them.''
Meanwhile, Bloomberg reports that New Zealand’s central bank is confident it can guide the economy to a “soft landing” even as it raises interest rates aggressively to tame inflation.
“It’s difficult to engineer a soft landing, typically a significant reduction in inflation is accompanied by negative economic growth, but there’s reasons to believe New Zealand is well placed to pull it off this time around,” Paul Conway, the Reserve Bank’s new chief economist, said in an interview Monday in Wellington.''
''The labor market is strong and that’s the underlying reason why the New Zealand economy is well placed to weather the storm.”
At 0.6540, the kiwi is flat on the day vs. the US dollar in a quiet start to the week.
''Higher rates are helping the Kiwi (that’s evident in NZD/AUD) but it’s likely that the May MPS marked peak RBNZ ‘hawkish surprise’. It’s hard to see future MPSs being so hawkish relative to market expectations; that makes us more cautious than otherwise on the NZD’s prospects,'' analysts at ANZ Bank argued, and said to the contrary, ''fears of a hard landing here also continue to percolate; that’s another potential NZD headwind.''
