The Reserve Bank has again left the Official Cash Rate (OCR) unchanged at 2.50 percent as per its scheduled Monetary Policy Statement made on the 14th March.
http://www.rbnz.govt.nz/news/2013/5184068.html
The tone of the Reserve Bank Governor was quite different to what many in the market had anticipated and he even left open the door to the possibility of a potential rate cut if the Kiwi dollar remained high. We see the likelihood of the OCR been increased this year as very low now so interest rates should remain at their current levels for some time yet. Floating thus still seems to be the most appropriate strategy for many with a home loan in our opinion.
Late Friday afternoon (15th March) we actually saw the ANZ Bank “increase” some of its short term fixed rates (as well as reduce its 3,4 and 5 year fixed rates) this despite the dovish tone of the Reserve Bank Governor. This decision by ANZ is likely due to its own internal margins been squeezed and the bank wanting to recoup these costs from its customers. Time will tell if ANZ’s competitors follow suit.
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