Central banks preview: RBNZ and BoC

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The Reserve Bank of New Zealand is expected to keep interest rates unchanged, while the Bank of Canada is seen raising rates by a quarter point. IGTV’s @AngelineOng takes a look at what’s driving the moves by both central banks.

 Angeline Ong | Financial Analyst, Presenter and Content Editor, London | Publication date: Monday 10 July 2023 

(Video Transcript)

Central banks on rates

Central banks continue to hog the spotlight this week with interest rate decisions from New Zealand and also Canada.

RBNZ

Let's start off with New Zealand. Ater hiking by 25-basis points at its last meeting and taking the official cash rate (OCR) to its highest level in nearly 15 years, the Reserve Bank of New Zealand (RBNZ) is very likely to stay put this month, keeping the OCR at 5.5%.

After its last position the bank said it was seeing soaring costs peaking at that level.

BoC

Now the situation is different in Canada. The Bank of Canada (BoC) unexpectedly hiked by 25-basis points in June and on Wednesday the bank is seen adding another quarter of a percentage point to its overnight rate, taking it to 5%.

Concerns about inflation have risen in recent weeks, and if headline inflation has been almost constantly falling since June last year, well, core inflation appears to be stickier. Core CPI has also been falling, but at a slower rate than the main index.

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