Pressure came off financial markets Wednesday afternoon after the central bank moved the official cash rate up 25-basis points, rather than the 50-point hike markets had been fearing.
Wednesday, November 24th 2021, 6:49PM
The Reserve Bank of New Zealand lifted the OCR to 0.75% as it slowly applies the brakes to an economy it considers to be running too hot.
ANZ economists said “markets breathed a sigh of relief”, not just because of the smaller hike but also because it only lifted its OCR forecast about half a percent higher than in August.
Traders were positioned for a hawkish statement and the delivery of a 50-basis point move, said KiwiBank chief economist Jarrod Kerr.
“Financial market traders reacted immediately, selling the Kiwi dollar and pushing wholesale rates down,” he said.
“The pivotal 2-year swap rate down over 20 basis points at one stage. That’s a big move…