However, the RBNZ will be hoping the $NZ doesn’t follow the $A example and lift following the cut.
" The RBA cut the cash rate to a record low… [and] a similar outcome is likely in New Zealand."
Sharon Zollner, Senior Economist, ANZ
One point where the two Australasian central banks are likely to diverge is in their comments on the housing market. Outgoing RBA Governor Glenn Stevens believes the likelihood of lower interest rates exacerbating risks in the housing market has “diminished”.
In NZ, with Hamilton house prices are up nearly 30 per cent year on year, a similar call on this side of the Tasman would certainly be a big one, indicating a lot of faith in the latest round of LVR restrictions.