The OCR is set to stay on hold longer than markets had anticipated after Reserve Bank’s monetary policy statement.

• RBNZ’s cautious forecasts suggest a rate hike could be as far away as late 2019 or early 2020.
• That’s unlikely to hold back the rising mortgage interest rates – but it could temper the pace of those rises.
• NZ’s financial conditions had firmed w/ long-term interest rates rising & continued upward pressure on the NZ dollar exchange rate.
• Meanwhile, the recent moderation in house price inflation was welcome, & in part reflected LVR restrictions & higher mortgage rates.

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