RBNZ policy decision due today – surprise tightening to 5.75% is a risk (but a small one)

<p>The Reserve Bank of New Zealand policy announcement is due at 0100 GMT, 2100 US Eastern time. </p><p>I posted a preview from ANZ earlier:</p><ul><li><a href="https://www.forexlive.com/centralbank/anz-expect-a-more-hawkish-tone-from-the-reserve-bank-of-new-zealand-next-week-20230926/" target="_blank" rel="follow" data-article-link="true">ANZ expect a more hawkish tone from the Reserve Bank of New Zealand next week</a></li></ul><p>Indeed, a 'hawkish hold' is widely expected. </p><p>KiwiBank:</p><ul><li>We’re expecting déjà vu, with no change in policy nor tone from the August update.</li><li> The cash rate is expected to be left untouched (5.50%) and the statement will reaffirm the need to keep rates restrictive. </li><li>The RBNZ’s job: stabilise inflation. </li></ul><p>Westpac:</p><ul><li>We think the RBNZ will keep the OCR at 5.50% at its October review. </li><li>We expect the RBNZ to retain the tightening bias expressed in the August Statement and will aim to retain maximum flexibility to tighten (or not) in November should data warrant. </li><li>A surprise tightening to 5.75% is a risk, but we think no more than a 10-20% chance. </li></ul><p>Also:</p><ul><li><a href="https://www.forexlive.com/centralbank/rbnz-policy-meeting-this-week-shadow-board-recommend-cash-rate-hold-at-55-20231001/" target="_blank" rel="follow" data-article-link="true">RBNZ policy meeting this week – "Shadow Board" recommend cash rate hold at 5.5%</a></li></ul>

This article was written by Eamonn Sheridan at www.forexlive.com.