NZ stocks: Markets keep eye on Bank

By PAUL PANCKHURST

Although the Reserve Bank is not expected to cut interest rates, the market will closely watch the tone of the monetary policy statement on Thursday.

"They might raise the prospect of a cut mid-year," said JBWere broker Humphrey Sherratt.

A commentary from First NZ Capital said the bank was expected to adopt a "wait and see" approach.

It said the two key issues for monetary policy were the impact of the likely war with Iraq and how to handle the so-called two-speed economy, with the domestic economy robust but exporters struggling.

The first issue involved too many uncertainties for a policy decision.

On the second: "Ultimately the bank has a dilemma, in that it can't engineer the desired combination of higher interest rates and a weaker currency."

Hence, wait and see.

Scheduled corporate news is sparse after the end of the reporting season for half-year earnings.

An exception: Restaurant Brands' fourth-quarter sales figures, to be released tomorrow.