Economist's view: There is uncertainty about whether the Reserve Bank of New Zealand will cut interest rates this week

Institutions have stated that the Reserve Bank of New Zealand will face a crucial decision this week, and economists and investors are uncertain whether the bank will initiate interest rate cuts or wait for further evidence of inflation returning to its target. Out of 21 surveyed economists, 12 predict that the Reserve Bank of New Zealand will maintain its interest rate at 5.5%, while 9 predict that it will begin a cycle of interest rate cuts. Nick Tuffley, Chief Economist at ASB Bank in Auckland, stated that the risk of monetary policy being overly tight has become a reality, and the time has come for the Reserve Bank of New Zealand to cut interest rates. However, this largely depends on how much their predictions have changed. Within less than two years, there may be signs of a third recession in the New Zealand economy, and the degree of inflation slowing down has exceeded the central bank's expectations. However, some domestic prices remain high, and if interest rates are cut now, it will be a year earlier than the signal the central bank sent out just three months ago. This will be a huge change for the Reserve Bank of New Zealand. (Jinshi)