RBNZ’s Hawkesby quashes bets on aggressive rate hike in October

Smooth path: Pedestrians walk near the RBNZ in Wellington. The central bank signals that it’s more likely to take a cautious approach. —Reuters

WELLINGTON: New Zealand’s central bank has damped speculation it could start its tightening cycle with a 50 basis-point interest-rate hike next month, signalling it’s more likely to take a cautious approach, according to economists.

In a speech published by the Reserve Bank of New Zealand (RBNZ) yesterday, assistant governor Christian Hawkesby said that amid uncertainty, and when risks are evenly balanced, “central banks globally tend to follow a smoothed path and keep their policy rate unchanged or move in 25 basis-point increments.”