The Reserve Bank of New Zealand (RBNZ) will retain its neutral stance when it keeps rates on hold at its meeting on Wednesday the 27th March 2019. The softening in GDP growth in the second half of 2019 will have come as a disappointment to the Bank. But given the tight labour market and gradual firming in underlying inflationary pressures, we don’t think the RBNZ will feel any need to lower interest rates. Instead, our view is that they will just leave rates on hold until late 2021.
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