RBNZ's Silk: Interest rates not needing hike yet, but inflation pressures rising soon
Reserve Bank of New Zealand (RBNZ) Assistant Governor Karen Silk said that the central bank is yet to see medium-term inflation pressures emerge, but it’s prepared to respond aggressively if they appear, Bloomberg reported on Friday.
Key quotes
There’s no early signs there at the moment of that this is definitively going to flow into really strong second round effects.
If the data turned round and showed that there were definitive second round effects coming through, this was going to get an awful lot worse, then you always keep that option open.
No need to await quarterly CPI data to act, must adopt more forward-looking approach.
Interest rates not needing hike yet, but inflation pressures rising soon.
Middle East conflict may cause lasting damage even if it ends quickly.
Reviewing high-frequency data for July decision, bias leans toward rate hikes in upcoming meetings.
Market reaction
As of writing, the NZD/USD pair is up 0.69% on the day at 0.5942.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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