Reserve Bank Governor Graeme Wheeler is set to publish his quarterly monetary policy statement at 9am this morning, while also saying if the bank will make any change to the Official Cash Rate. (OCR)
We will be livestreaming Wheeler's statement and press conference from 9am here at nzherald.co.nz.
The financial markets see no chance of any change in the OCR focus will be on how the accompanying monetary policy statement describes the balance of risks going forward.
Since the December statement the New Zealand dollar has risen 4 per cent on a trade-weighted basis, and the export outlook is further clouded by a lack of rain clouds on the literal horizon. On the other hand the housing market has already blown away the bank's sanguine projections of three months ago.
The December Monetary Policy Statement indicated the bank expected to start raising the OCR in the March quarter next year.
The latest Reuters' poll shows economists split down the middle on whether it will be the December 2013 or March 2014 quarter. Money market pricing implies a better than two-thirds chance it will be December.
In any case improving sentiment about the global economy has lowered banks' funding costs and mortgage rates.
The fact that it is only a matter of time before the bank needs to tighten, rules out a cut to the OCR to relieve pressure on the exchange rate.
Today's statement will also be scrutinised for clues as to whether the bank is of a mind to reach for tools available to it as the banks' regulator.
NZ Herald/ Brian Fallow