{"id":120256,"date":"2021-08-23T05:51:43","date_gmt":"2021-08-23T05:51:43","guid":{"rendered":"https:\/\/fin2me.com\/?p=120256"},"modified":"2021-08-23T05:51:43","modified_gmt":"2021-08-23T05:51:43","slug":"nz-cenbank-under-no-pressure-to-act-as-delta-outbreak-not-game-changer-yet-rbnz-economist","status":"publish","type":"post","link":"https:\/\/fin2me.com\/markets\/nz-cenbank-under-no-pressure-to-act-as-delta-outbreak-not-game-changer-yet-rbnz-economist\/","title":{"rendered":"NZ cenbank under no pressure to act as Delta outbreak not 'game changer' yet- RBNZ economist"},"content":{"rendered":"
WELLINGTON (Reuters) – The fresh outbreak of the coronavirus in New Zealand is not a \u201cgame changer\u201d yet and there is no pressure to act on monetary policy, a senior central bank official said on Monday, as authorities struggle to contain the spread of the Delta variant.<\/p> \u201cAt this stage we don\u2019t see it as a game-changer in the sense that our underlying economic analysis and views should be thrown out of the window and we should start again,\u201d the Reserve Bank of New Zealand\u2019s (RBNZ) Chief Economist Yuong Ha said in a phone interview with Reuters.<\/p>\n \u201cIt\u2019s not like we were 12 months ago,\u201d he added.<\/p>\n However, Ha said the outbreak here of the highly transmissible Delta variant in New Zealand has raised some economic uncertainty.<\/p>\n Last week, the RBNZ delayed raising rates here after the country was put into a COVID-19 lockdown following the outbreak, although policymakers flagged tightening was on the cards before the year was out.<\/p>\n \u201cOf course Delta, given how contagious and transmissible it is, may cast some amount of uncertainty, but …. our assessment that monetary policy stimulus should be removed at some point still sits behind our thinking at this stage,\u201d he said.<\/p>\n The Delta outbreak has now widened to 107 cases. New Zealand Prime Minister Jacinda Ardern is expected to announce a decision on whether to extend the lockdown at a press conference later on Monday.<\/p>\n The country has recorded just over 2,600 confirmed coronavirus cases overall and 26 COVID-19 deaths.<\/p>\n New Zealand\u2019s successful elimination of COVID-19 fired a hot economic recovery and stoked inflation, which had prompted analysts to forecast at least two hikes before year-end. But the latest COVID-19 outbreak has led many analysts to push out their tightening calls, with the market pricing a 60% chance of a hold at the RBNZ\u2019s next meeting on Oct. 6.<\/p>\n Employment numbers have surprised on the upside recently and are even stronger than pre-COVID levels, and labour shortages are also getting worse.<\/p>\n When asked if pressure was growing on RBNZ to act on policy, Ha said: \u201cI don\u2019t think so. I think we are in a really good position in terms of optionality.\u201d<\/p>\n Ha said the central bank has learnt from previous lockdowns that demand and household spending tend to bounce back quite quickly especially given the level of fiscal support that\u2019s also been activated at present.<\/p>\n \u201cSo that gives us the confidence that the patterns we saw in the past will be repeated,\u201d he said.<\/p>\n Ha said the currency was a useful \u201cshock absorber\u201d so there was no concern around how the New Zealand dollar is behaving from the stand point of monetary policy.<\/p>\n \u201cThe currency is performing as it normally has done.\u201d<\/p>\n The New Zealand dollar was steady on the day, fetching $0.6846 and above the 9-1\/2-month low of $0.6807 reached Friday.<\/p>\n