The 4th September earthquake in Christchurch means that it is virtually certain that the Reserve Bank of New Zealand (RBNZ) will keep its cash rate unchanged at 3.0%. Recent economic data have been disappointing too, so even before the earthquake the RBNZ was minded to tighten policy more slowly than it had previously envisaged. We expect the next hike to come in January and see the cash rate reaching 4.0% by end-2011. This is in line with market expectations but more dovish than the median view of economists in the latest Bloomberg survey.