NZD/USD flows: RBNZ Suggest Restrictive Rates to Be Longer

RBNZ kept rates unchanged at 5.5% but suggest OCR to stay restrictive for a sustained period of time. The statement is balanced as they reviewed both the upside and downside of inflation outlook. They seems to be preparing market participants of a spike in Q1 CPI from preliminary data they have reviewed and suggest such to be transitory. The key takeaway from the April meeting would be the cut by year end 2024 shown in the February OCR forecast may not materialize unless inflation is back to target range by that time.

Market is reading this as "higher for longer" and see NZD/USD 0.17% higher at 0.6070.