NZ RBNZ Gov Hawkesby Speaks

RBNZ'S HAWKESBY: OUR INDICATORS ARE TELLING US NOW THAT THE ECONOMY EXPANDED THROUGH Q3. ... RBNZ GOV HAWKESBY: ECONOMIC RECOVERY IS UNDERWAY NOW, WITH H2 GDP RUNNING AT NEARLY 3% ANNUALIZED. RBNZ GOV HAWKESBY: WE ACTUALLY NEED TO CREATE SOME INFLATION THROUGH STRONGER ECONOMIC ACTIVITY RBNZ's Hawkesby: I have a high degree of confidence that over the next few quarters inflation is going to be coming down.

RBNZ GOVERNOR HAWKESBY: WE THINK WE ARE IN A POSITION WHERE WE CAN PUT OUT AN OCR PROJECTION, WHICH IS BROADLY UNCHANGED. ... RBNZ GOV HAWKESBY: OCR OUTLOOK REMAINS BROADLY UNCHANGED; WE CAN WATCH AND WAIT TO SEE HOW CONDITIONS EVOLVE NEXT YEAR. RBNZ'S HAWKESBY: THE ECONOMY HAS BEEN THROUGH A TOUGH PERIOD. ... RBNZ's Hawkesby: We have needed to kickstart demand through rates. RBNZ'S HAWKESBY: THERE ARE A NUMBER OF LABOR MARKET INDICATORS THAT ARE STARTING TO PICK UP. ...

RBNZ Governor Hawkesby: house prices and credit growth not raising red flags, can have more baseline mortgage loan-to-value ratio settings

Thank you for the chance to join the conference for the regulatory fireside chat. It’s the fourth year in a row that I’ve had the opportunity to participate, and the first time as Governor under this interim 6-month term. I want to acknowledge that it’s been a challenging period for the Reserve Bank of New Zealand (RBNZ), as we face a test of trust and confidence in us as an organisation. It's typical for the RBNZ to be “in the news” for our policy decisions, publications and research. But for too long this year the RBNZ has been “the news”, following the departure of the Governor in March, the loss of our Board Chair in August, and everything in between. Trust and confidence in our economic institutions is what underpins our financial system and supports economic prosperity for New Zealanders. That is why I want to assure you that we are resolutely focused on our mandate of delivering low and stable inflation in medium term, and a resilient and enabling financial system. Because this is our best contribution to enable you and your clients to have the confidence to Transform for Tomorrow – the theme of this year’s conference. One of the things that gives me confidence that we are well placed to deliver on our mandate is the governance changes that we have undergone, as part of our own transformation over the past 7 years. Previously, from a legal perspective, the Governor was the RBNZ, as the sole decision maker on monetary policy, and all other policy and operational matters. Rolling the clock forward, we now have a well-established Monetary Policy Committee (MPC) responsible for formulating monetary RBNZ GOVERNOR HAWKESBY: CENTRAL PROJECTION FOR OCR TO DROP TO ABOUT 2.50% BY END OF YEAR, BUT THAT COULD HAPPEN FASTER OR SLOWER BASED ON ECONOMIC RECOVERY EVOLUTION ... RBNZ GOVERNOR HAWKESBY: SPEED OF NEW ZEALAND’S ECONOMIC RECOVERY WILL BE THE KEY FACTOR INFLUENCING THE FUTURE PATH OF THE OCR ...

RBNZ GOVERNOR HAWKESBY: REACTION TO OUR INTEREST RATE CUTS HAS SO FAR BEEN SLOWER THAN ANTICIPATED RBNZ GOVERNOR HAWKESBY: GLOBAL UNCERTAINTIES HAD A PROLONGED IMPACT ON BUSINESS AND CONSUMER CONFIDENCE IN NEW ZEALAND RBNZ ASSISTANT GOVERNOR SILK: NOT GOOD FOR ANYBODY THAT… RBNZ: GOVERNOR HAWKESBY SAID THE CASE FOR A 50BP RATE CUT WAS BASED ON BUSINESSES AND CONSUMERS BEING OVERLY CAUTIOUS, REQUIRING A SUBSTANTIAL BOOST TO CONFIDENCE AND ACTIVITY. RBNZ's Gov. Hawkesby: We expect lenders to price in projected cuts. RBNZ GOVERNOR HAWKESBY: INCREASED TARIFFS AND TRADE BARRIERS EFFECTIVELY A NEGATIVE DEMAND SHOCK FOR THE WORLD

RBNZ Hawkesby: Sees slower global growth curbing New Zealand recovery RBNZ's Hawkesby: July rate cut not certain

RBNZ's Hawkesby sees growth headwinds in near term RBNZ GOVERNOR HAWKESBY: THERE'S WEAKER DEMAND AND WEAKER INFLATION PRESSURES THAN THERE WERE IN FEBRUARY THERE IS A LOT OF DIFFERENT WAYS THAT THIS COULD PLAY OUT FROM HERE THERE IS UNCERTAINTY AROUND WHERE THOSE TARIFFS WILL LAND, THEY COULD BE VERY DIFFERENT RBNZ’S HAWKESBY: REVISION TO OCR FORECAST TRACK WAS MODEST RBNZ Hawkesby: High commodity prices insulate New Zealand economy

RBNZ GOVERNOR HAWKESBY: THREAT OF TRADE WAR HAS DECREASED RECENTLY BUT STILL CONSIDERABLE UNCERTAINTY ON HOW THINGS WILL PLAY OUT