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NZ central bank expected to cut rates to fresh low in June: poll
[WELLINGTON] New Zealand's central bank is expected to cut rates in June after it stood pat this week but maintained its easing bias, as price pressures and demand for its products remain soft.
The Reserve Bank of New Zealand (RBNZ) held the rate at a record-low 2.25 per cent on Thursday but reiterated further rate cuts may be needed given weak inflation.
Of 12 economists polled following Thursday's decision, 11 expect the central bank to cut rates to 2.00 per cent at the June 9 policy review while one expects rates to remain on hold.
After a robust few years, New Zealand's economy has started to slow with inflation cooling sharply amid falling global dairy prices and a slowdown in China, its largest trading partner.
ANZ's business survey published on Friday showed general business confidence and inflationary expectations improving slightly but remaining weak.
The survey's headline measure showed a net 6.2 per cent of respondents expected the economy to improve over the year ahead, compared with 3.2 per cent in the previous poll.
Inflation expectations stood at 1.42 per cent versus 1.38 per cent. "This fairly underwhelming business confidence survey suggests the RBNZ should opt to deliver the next official cash rate sooner, rather than later," said ASB Senior Economist Jane Turner.