logo
Statement from RBNZ chair Neil Quigley about OIAs on Adrian Orr's resignation

Statement from RBNZ chair Neil Quigley about OIAs on Adrian Orr's resignation

Scoop12-06-2025
'RBNZ was late in producing a response to some of the OIAs we received on Adrian Orr's resignation. I regret that this delay occurred,' Reserve Bank of New Zealand – Te Pūtea Matua Chair Neil Quigley says.
'The circumstances and the volume of information associated with the OIAs on Adrian Orr's resignation were complex, and we needed to be sure that our consideration of relevant information was comprehensive.
"As well as our obligations under the Official Information Act, we needed to take into careful consideration the former Governor's exit agreement and privacy law. For this reason, we extended consultation on the information and our response, including review by senior external counsel,' he said.
'On 5 March I was limited in what I could say about the former Governor's resignation both by the terms of his exit agreement and the fact that we were still working through finalisation of the detail of the next Five-Year Funding Agreement (FYFA).
'We were conscious of the need to explain to staff of the RBNZ the potential implications for staffing levels of a lower level of funding and needed time to consider the details of that.
'We are taking into account the feedback that we have received on our management of these OIA requests and looking carefully at how we can improve our response times in the future," Mr Quigley said.
Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

The RBNZ Paused To Assess. It Was A Wait And See. And We Still See More Cuts Required
The RBNZ Paused To Assess. It Was A Wait And See. And We Still See More Cuts Required

Scoop

time16 hours ago

  • Scoop

The RBNZ Paused To Assess. It Was A Wait And See. And We Still See More Cuts Required

Press Release – Kiwibank After six straight meetings, 225bps of cuts, the RBNZ took a breather. The official cash rate remains at 3.25%. Global uncertainty remains high and inflation looks set to rise toward 3%. The RBNZ is taking a wait and see approach. What we all expected was what we got. The RBNZ kept the cash rate unchanged at 3.25% today. It's the first pause since the cutting cycle commenced in August last year. The RBNZ are taking a wait and see approach amid high global uncertainty and a near-term spike in inflation. But their bias still leans towards further easing. Risks to the outlook remain tilted to the downside. Our forecast continues to see medium term inflation at risk of falling below 2%. The direction for rates from here is still clear. But the timing is more up in the air. After six straight meetings delivering rate cuts, totalling 225bps, the RBNZ has today taken a widely expected breather. The cash rate remains unchanged at 3.25%…for now. The RBNZ's bias still leans towards further easing. But the pace of delivery has clearly slowed as policymakers feel their way towards the bottom of this cycle. It's a bottom which we're all still trying to figure it out. Some have it at 3%, others at 2.75%, while we continue to advocate for a stimulatory 2.5%. The RBNZ's OCR track in May printed a 2.85% endpoint. That signals a move to 3% and a 60% chance of a move to 2.75%. We're still on the trajectory for lower rates. As the RBNZ have put it 'If medium-term inflation pressures continue to ease as projected, the Committee expects to lower the Official Cash Rate further.' The RBNZ are well aware of the temporary inflation spike we're seeing right now. Food prices have reaccelerated, household energy costs are climbing, all the while administrated costs have remained elevated. A lift in inflation towards the top of the RBNZ target band is expected over the current and coming quarter. But a spike is still just a spike. And in the medium-term, the RBNZ continues to expect headline inflation returning to around 2% by early 2026. So if it had been us today, we would have cut. And we would cut again in August. Because why wait when medium term inflation remains contained? Yes, there is worry right now about the spike in inflation we're experiencing. But monetary policymakers must look through short-term volatility, even if it's eye-watering. Monetary policy is set today to influence the medium-term. And risks to the outlook are skewed to the downside. A global growth slowdown is expected with US tariffs. And NZ export prices are likely to come under pressure. At the same time, as the RBNZ's statement points out, there is 'significant spare capacity' and a 'large negative output gap' in the New Zealand economy. Note the use of the words significant and large. We think it's significant. All of these factors are disinflationary. And we've seen that in the QSBO survey. There is a net 2% of firms looking to reduce their prices in the coming months. History tells us that pricing behaviour like that only happens during recessions. If things continue as we expect then in the medium term the real risk is that inflation undershoots the RBNZ 2% mid-point. Still taking a page out of the RBA's playbook, the RBNZ have decided to take a wait and see approach today. Waiting for what? Well, ' Some members emphasised that waiting would allow the Committee to assess whether weakness in the domestic economy persists, and how inflation and inflation expectations evolve.' So, the next few data releases will be carefully picked apart. Here's three data prints we've circled before the August meeting: June quarter inflation (21 July): will likely come in hot. But the factors driving the acceleration must be considered. Inflation is set to rise to the top-end of the RBNZ's 1-3% target band. The rapid deceleration in imported inflation, which helped to pull down the headline rate, is reversing course. Prices for some food items like dairy and meat have increased recently, which will support tradables in the near term. So it's largely a story of imported inflation – the type over which the RBNZ has no influence. Rather, domestic inflation is their domain. Non-tradables remains elevated, but has become less broad-based. Capacity pressures have eased, and the moderation in wage growth suggests that price-setting behaviour is adapting to the low-inflation environment. Given significant spare capacity remains in the economy, we expect further easing in non-tradables. Watch the headline rate on 21 July. Watch even closer the non-tradables rate. The RBNZ has pencilled in 2.6%yoy and 3.7%yoy, respectively. June quarter labour market (06 August): will likely show a further increase in the unemployment rate. We see the unemployment rate lifting to 5.2% in the June quarter, on its way to a slightly higher peak of 5.3%, well above the goldilocks NAIRU of around 4%. We may be nearing the peak, but we're still some way away from a rebound in employment growth. Hiring intentions remain weak. September quarter inflation expectations (07 August): Near-term inflation expectations (1- and 2-year ahead) will likely print higher, pulled up by headline inflation. But as per the RBNZ's focus on 'medium-term inflation pressures', how the 5-year and 10-year ahead measures evolve will be of greater interest. And given the dominant downside risks to the economic outlook, we may well see inflation fall below their 2% target. Forecasts like that could see the medium-term expectations fall. Market reaction In terms of reaction in financial markets, there wasn't one… not really. The Kiwi currency wanted to go higher, it tried to go higher, but ended up slightly lower. It was a nice scenic trip to nowhere. The Kiwi looks to be glued to 60c (give or take). Whereas wholesale rates markets were much more convinced, without conviction. The two-year swap rate lifted 4bps, only to fall back to where it started, at 3.21%. So, no reaction in rates either. That's a whole lot of talk about nothing. Only an economist could write so much about so little. But that's not a bad thing. The RBNZ delivered as expected. It was a pause to assess. It was a wait and see. So, let's come back in August. RBNZ statement 'The Monetary Policy Committee today agreed to hold the Official Cash Rate at 3.25 percent. Annual consumers price inflation will likely increase towards the top of the Monetary Policy Committee's 1 to 3 percent target band over mid-2025. However, with spare productive capacity in the economy and declining domestic inflation pressures, headline inflation is expected to remain in the band and return to around 2 percent by early 2026. Elevated export prices and lower interest rates are supporting a recovery in the New Zealand economy. However, heightened global policy uncertainty and tariffs are expected to reduce global economic growth. This will likely slow the pace of New Zealand's economic recovery, reducing inflation pressures. The economic outlook remains highly uncertain. Further data on the speed of New Zealand's economic recovery, the persistence of inflation, and the impacts of tariffs will influence the future path of the Official Cash Rate. If medium-term inflation pressures continue to ease as projected, the Committee expects to lower the Official Cash Rate further.'

OCR held at 3.25% by Reserve Bank
OCR held at 3.25% by Reserve Bank

1News

time17 hours ago

  • 1News

OCR held at 3.25% by Reserve Bank

The Official Cash Rate (OCR) has been held at 3.25%. It is the first time the OCR has not received a cut since July 2024, marking the end of six consecutive cuts. The decision to hold the OCR at its current rate by the Reserve Bank of New Zealand (RBNZ) was widely expected by economists. Last week, Infometrics economist Brad Olsen told 1News expectations in the market are for no cut to the OCR in July 'as the RBNZ takes a pause'. He did however add the market is expecting 'one further cut', which would be 'pencilled in at some point before the end of 2025'. ADVERTISEMENT Today, RBNZ said annual consumers price inflation will likely increase towards the top of the Monetary Policy Committee's one-to-three percent target band over mid-2025. "However, with spare productive capacity in the economy and declining domestic inflation pressures, headline inflation is expected to remain in the band and return to around 2% by early 2026. "Elevated export prices and lower interest rates are supporting a recovery in the New Zealand economy. However, heightened global policy uncertainty and tariffs are expected to reduce global economic growth. This will likely slow the pace of New Zealand's economic recovery, reducing inflation pressures." Finance Minister Nicola Willis said more Kiwis will benefit when they re-fix their mortgage this year, and pointed to the 2.25% point reduction in the OCR since August 2024. Finance Minister Nicola Willis. (Source: Breakfast) "Lower interest rates free-up household budgets for spending elsewhere and they ease the path for those wishing to enter the housing market. "They also provide relief to interest-rate sensitive sectors of the economy, including building and construction, with lower interest rates often providing a kick-start for big new projects." ADVERTISEMENT Willis to meet Fonterra boss over dairy prices The Finance Minster signalled she would meet with the Fonterra chief executive "in the next little while" to talk about "what we can do to make sure New Zealanders have affordable cheese, milk and butter". "What I worry about is when I see that it appears you can get cheaper milk and butter in other countries than here, and as I say I'm going to be talking to Fonterra about what's behind that, because I'm on the side of New Zealanders who say 'well that doesn't seem quite right.'" Willis added she was "interested" to see how much of the dairy prices in New Zealand were due to "supermarket competition" and "prices Fonterra are passing through". RBNZ outlines path for further cuts RBNZ added the current economic outlooks remains "highly uncertain". "Further data on the speed of New Zealand's economic recovery, the persistence of inflation, and the impacts of tariffs will influence the future path of the Official Cash Rate. ADVERTISEMENT "If medium-term inflation pressures continue to ease as projected, the Committee expects to lower the Official Cash Rate further." Are mortgage rates expected to drop? Olsen told 1News banks are likely to tweak their rates slightly to remain competitive, but large cuts to interest rates have largely run their course. 'Further OCR cuts or global interest rate declines would be needed to see any more substantial easing in rates.'

OCR Steady As She Goes
OCR Steady As She Goes

Scoop

time20 hours ago

  • Scoop

OCR Steady As She Goes

Minister of Finance The Government's responsible fiscal management has supported the Reserve Bank to keep the Official Cash Rate low, Finance Minister Nicola Willis says. The Reserve Bank of New Zealand today announced it would keep the Official Cash Rate (OCR) at 3.25 per cent while continuing to foreshadow further reductions in the OCR. 'There has been a 2.25 percentage point reduction in the Official Cash Rate since August last year – easing the cost of borrowing and delivering much needed cost of living relief for many New Zealand households,' Nicola Willis says. 'While many Kiwis are already experiencing lower mortgage repayments off the back of previous OCR reductions, more will benefit when they re-fix their mortgage this year, meaning the positive effects of previous rate drops will continue to flow-through our economy over the coming months. 'Lower interest rates free-up household budgets for spending elsewhere and they ease the path for those wishing to enter the housing market. They also provide relief to interest-rate sensitive sectors of the economy, including building and construction, with lower interest rates often providing a kick-start for big new projects. 'Despite global uncertainty, the Government is continuing to drive New Zealand's economic recovery forward. Our careful stewardship of the Government books and our ongoing efforts to reduce costly laws and regulations mean inflation and interest rates can stay lower than would otherwise be the case. 'Gone are the days of reckless economic management fuelling the flames of inflation and interest rates – New Zealand now has steady hands at the wheel, and a Government that is determined to keep our economic fundamentals in good order.'

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into a world of global content with local flavor? Download Daily8 app today from your preferred app store and start exploring.
app-storeplay-store