Thursday 16 August 2012

Interest Rate Holiday until June 2013 ???

Low fixed‐term rates still offer cheap certainty

  • We expect the RBNZ to leave the OCR unchanged at 2.5% until June 2013.
  • Eurozone debt crisis likely to dominate the economic outlook over the coming year.
  • Some fixed rates remain below or similar to floating rate, offering window of opportunity.

The economic recovery remains gradual and inflation pressures are currently subdued. While there have been some encouraging signs of recovery in domestic demand, the ongoing Eurozone debt crisis continues to overshadow the economic outlook. The elevated level of the NZD will continue to keep near‐term inflation subdued and the balance of risks now suggest the RBNZ will leave the OCR unchanged at 2.5% until June 2013. Nonetheless, we expect Eurozone concerns to eventually fade, and the focus to return to growing domestic inflation pressures (particularly as the Canterbury rebuild gets underway. As a result, we expect the RBNZ will need to steadily increase the OCR over the second half of 2013 and over 2014, returning the OCR to 4% by late‐2014. For borrowers, this means that floating mortgage rates are likely to remain at very low levels for the time being, although borrowers do need to be prepared for rising interest rates from the second half of 2013.

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News Archive

Thursday 13th of December

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Wednesday 5th of December

The Reserve Bank today left the Official Cash Rate (OCR) unchanged at 2.5 percent.

 Reserve Bank Governor Graeme Wheeler said: “Economic growth has slowed in recent read more...

Sunday 2nd of December

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Sunday 7th of October

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Tuesday 4th of September

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Monday 3rd of September
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Thursday 16th of August
Low fixed‐term rates still offer cheap certainty

  • We expect the RBNZ to leave the OCR unchanged at 2.5% until June 2013.
  • Eurozone debt read more...
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Wednesday 25th of April

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Tuesday 17th of April
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