The Reserve Bank of New Zealand will almost certainly leave interest rates on hold at 1.75% at its policy meeting on Thursday 28th June and Governor Orr may well repeat that rates will stay at this level for “some time to come”. But with GDP growth likely to fall short of the RBNZ’s projections and inflation set to remain subdued, we anticipate that rates will remain on hold for even longer than the RBNZ or the financial markets currently expect. We suspect that the first rate rise may not occur until 2020.
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