RBNZ meeting (Thursday)

Credit S.

We expect the RBNZ to raise the cash rate by 25bp, its fourth consecutive hike this cycle,
in line with the consensus and market pricing. The tone of the statement is likely to be less
hawkish, in light of the moderation in non-tradable inflation in Q2 and continuing sharp fall
in dairy prices. In addition, we see a chance that the RBNZ will step up its efforts to talk
down NZD. Verbal intervention is more effective now in our view, given a credible threat of
the RBNZ being on hold this year after the July hike