With the latest economic data coming in weaker than it had anticipated, the RBNZ will likely opt for a smaller 25bp hike to the official cash rate (OCR) at its upcoming meeting on April 5th. We expect only one more 25bp rate hike after that, with the OCR peaking at 5.25% in May. As a protracted downturn creates deflationary pressures, we think the RBNZ will pivot to rate cuts by year-end.
Asia Drop-In (30th Mar.): Our monthly briefing on the big regional stories is all about the recent banking turmoil, including the potential macro fallout but also where the risks lie on Asian bank balance sheets. Register now.
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