THE LONG AND THE SHORT OF IT
In mid-July, the Reserve Bank New Zealand gave its clearest indication yet that it is prepared to raise interest rates this year.
The central bank kept the official cash rate on hold at 0.25%, but reduced its monetary support by ending its LSAP quantitative easing programme from July 23.
The RBNZ also removed wording around needing “considerable time and patience” to meet its targets, fuelling speculation about an imminent rate increase. Strong inflation data in July has furthered the expectations.
Wholesale markets have reacted, and so have NZ’s major banks. The big four, Kiwibank, The Co-operative and TSB hiked most of their fixed rate loans in mid-July by roughly
