Federal Reserve Probes Big Banks Over Private Credit Exposure Amid Growing Systemic Risk Concerns 
South Korea Central Bank Signals Cautious Policy Amid Inflation and Middle East Tensions 
Australia Bans Card Payment Surcharges Starting October 2025 
Bank of Korea Nominee Shin Hyun-song Signals Possible Rate Hike Amid Middle East Inflation Fears 
Bank of Japan Warns of Regional Economic Risks Amid Middle East Conflict and Rising Oil Prices 
Bank of Japan's Ueda Flags Low Real Interest Rates as Key Factor in Rate Hike Timing 
ECB Warns of Rising Inflation Risks Amid Iran War Energy Shock 
Citigroup Delays Fed Rate Cut Forecast Amid Strong Jobs Data and Inflation Concerns 
Gold Prices Fall Amid Rate Jitters; Copper Steady as China Stimulus Eyed 
RBI Clamps Down on Rupee NDF Activity, Banks Face Steeper Losses 
India's Central Bank Holds Rates Amid Iran War Energy Shock 
At today’s meeting, Reserve bank of New Zealand (RBNZ) kept monetary policy unchanged with overnight cash rate at 1.75 percent.
Let’s see in the monetary policy, how the bias stands for future actions,
- The pick-up in GDP growth in the June quarter was partly due to temporary factors, and business surveys continue to suggest growth will be soft in the near term. Employment is around its maximum sustainable level. However, core consumer price inflation remains below our 2 percent target mid-point, necessitating continued supportive monetary policy. (Mild dovish bias)
- GDP growth is expected to pick up over 2019. Monetary stimulus and population growth underpin household spending and business investment. Government spending on infrastructure and housing also supports domestic demand. The level of the New Zealand dollar exchange rate will support export earnings. (Neutral bias)
- As capacity pressures build, core consumer price inflation is expected to rise to around the mid-point of our target range at 2 percent. (Neutral bias).
- Downside risks to the growth outlook remain. Weak business sentiment could weigh on growth for longer. Trade tensions remain in some major economies, raising the risk that trade barriers increase and undermine global growth. (neutral to mild dovish bias)
- Upside risks to the inflation outlook also exist. Higher fuel prices are boosting near-term headline inflation. We will look through this volatility as appropriate. Our projection assumes firms have limited pass-through of higher costs into generalized consumer prices, and that longer-term inflation expectations remain anchored at our target. (Mild hawkish bias)
- To support the economy, the interest rate is likely to remain in expansionary territory for a considerable period. (Neutral bias)
Compared to the previous statement, this one is same on balance.
The statement clearly suggests that RBNZ is in no hurry to follow other central banks such as the U.S. Federal Reserve in increasing rates. Just like last time, RBNZ dropped its reference of stronger Kiwi dollar. Expect no major changes even hint in the first two quarters 2019. The Kiwi dollar is currently trading at 0.679 against the USD. Up this week on a weaker USD.
