RBNZ's Spencer: Migration policy will be an offsetting factor

The Reserve Bank of New Zealand (RBNZ) Acting Governor Grant Spencer is delivering his comments, via Reuters, on the monetary policy outlook following the bank's decision to keep the official cash rate steady at 1.75%.

There is an additional fiscal stimulus relative to picture we had last August.

Migration policy will be an offsetting factor.

The overall impact of the new government's policy is a positive stimulus to aggregate demand of about 0.5% of GDP.

Key notes

NZD/USD spiked on RBNZ bullish, (more hawkish 2019 ), statement.

NZD/USD spiked 30 pips on the back of the RBNZ on hold, leaving the Official Cash Rate (OCR) unchanged at 1.75 percent forecasting rates rising in Q2 2019 vs Q3 previously, hence the bid. Currently, NZD/USD is trading at 0.6947, up 0.60% on the day, having posted a daily high at 0.6965 and low at 0.6897.

RBNZ: OCR forecast was tweaked slightly in a hawkish direction - Westpac.

"The RBNZ's Monetary Policy Statement this morning kept the OCR on hold at 1.75%, as was widely expected. The policy guidance paragraph was a repeat of September's, but the OCR forecast was tweaked slightly in a hawkish direction. Markets reacted accordingly," note Westpac analysts.

About the RBNZ interest decision and statement

The RBNZ interest rate decision is announced by the Reserve Bank of New Zealand. If the RBNZ is hawkish about the inflationary outlook of the economy and raises the interest rates it is positive, or bullish, for the NZD. The RBNZ rate statement contains the explanations of their decision on interest rates and commentary