The Reserve Bank is poised to announce a decision on the Official Cash Rate at 9am this morning, when it is widely expected to hold rates at a record low of 2.5 per cent.
Both money market pricing and the consensus among market economists are predicting only a one-in-six chance of an OCR cut today.
Looking further ahead, their views diverge, however. Most forecasters polled by Reuters expect the Reserve Bank to hold firm until the March quarter next year and for the OCR to be 3 per cent by this time next year.
By contrast as recently as last week the markets were pricing in an OCR of 2.25 if not 2 per cent by then and they still consider it likely that the OCR in a year's time will be lower than it is now.
Since the bank last reviewed the OCR statistical revisions have indicated the New Zealand economy entered this year with less momentum than previously thought.
