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26 May 2021
7 min read

RBNZ send the Kiwi soaring

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The RBNZ went full hawk at the latest meeting, catching the market off guard.

No changes to current policy, but the forward guidance was exceptionally hawkish.

Towards the end of last year, they were still talking about negative rates. Those days are gone, and all reference to a negative cash rate has been dropped from the minutes.

Snippets via Westpac

The re-introduced OCR track showed a full rate hike by Q3 2022 (which markets had already priced) and a total of 150bp of hikes by mid-2024 (above market pricing).

Comparing the April statement (emphasis mine)

The Committee agreed to maintain

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