SYDNEY- New Zealand’s inflation expectations remained subdued in the fourth quarter, a Reserve Bank of New Zealand survey showed on Monday, cementing expectations the central bank will deliver a third straight interest rate cut later this month.
Two-year inflation expectations, seen as the time frame when RBNZ policy action will filter through to prices, slightly rose to 2.12 percent from 2.03 percent in the third quarter, RBNZ’s quarterly survey showed.
The RBNZ cut its benchmark rate in August, the first reduction since March 2020, and followed it up by slashing rates again by an outsized 50 basis points to 4.75 percent in October. It has a monetary policy goal of keeping inflation within 1 percent to 3 percent. The survey data from 40 business leaders and professional forecasters saw annual price increases averaging 2.05 percent over the year ahead, down from 2.40 percent previously.
