New Zealand - Rates may not rise until late 2021

The Reserve Bank of New Zealand will keep interest rates unchanged at 1.75% at the policy meeting on Thursday 27th September and will probably acknowledge that GDP growth in Q2 was stronger than it had anticipated. But we still think that economic activity will fall short of the Bank’s projections. We now expect the Bank won’t raise rates before late in 2021. That would be much later than the consensus and the market expect, which is why the New Zealand dollar should weaken further.