KEY POINTS:
Currency markets reacted strongly to today's hike in the Official Cash Rate (OCR) to 8 per cent, flinging the New Zealand dollar up more than four-tenths of a cent within a minute from below US75.10c to above US75.50c.
By 9.15am the kiwi had hit another record for the 22 years since it was floated of US75.66c before easing slightly.
Speaking to reporters after the decision, Dr Bollard was asked about the significance of there being no comment from the Reserve Bank about future interest rate rises.
Dr Bollard replied: "You can draw your own conclusions".
Bank of New Zealand senior economist Craig Ebert said the Reserve Bank was "doing what they've to got to do. There's an urgency to slow the economy down and they're starting to wake up to that."
The more people read the Reserve Bank's statement the more hawkish their impressions of it would be.
"We're very close to calling another rate hike in July. All the risks point that way," Mr Ebert said.
Goldman Sachs JBWere economist Shamubeel Eaqub agreed that the Reserve Bank's statement was "quite hawkish" and appeared to have left open the possibility of one further hike.
"We think we are going to get data which is going to show very weak economic activity over the coming months, but the risk is that we do get one more hike at some stage. But our central call remains no more hikes," Mr Eaqub said.
UBS senior economist Robin Clements was less sure, saying he still thought it would be a wait-and-see, "so maybe that's it for hikes for a while."
Westpac chief economist Brendan O'Donovan noted the bank had forecast the inflation would peak dangerously close to the top of the target band and he forecast at least one more rate hike.
"The question is whether we see a pause in July, but there is well over a 50 per cent chance of a follow-up move."
"The balance of risks for the Reserve Bank are all stacked up one way, they've given no clear guidance on the next move, trying to make it data-dependant, but clearly within the forecasts it's a large inflation problem.
ANZ Bank chief economist Cameron Bagrie said the bank had no headroom to absorb more inflation pressure.
"So this is another late-cycle anti-growth insurance policy to make sure inflation does get back into that 1 to 3 per cent policy band."
Craig Ebert of BNZ said the more he read the statement, the more hawkish it seemed.
"We're very close to calling another rate hike in July. All the risks point that way.'
- NZPA
