The Reserve Bank's Head of Economics and Chief Economist, Yuong Ha, has stated that trade links between new Zealand and Russia, Ukraine are minor, with some impact on commodities.
Ha said it is too early to say what effect the Russian situation might have on RBNZ policy
Key comments
Ha says still have more work to do on controlling inflation, need policy to be contractionary.
Ha says rates 100 basis points above neutral of 2.0% is reasonable from historical perspective.
Ha says content with market pricing of rate outlook, 50 bps moves are a possibility if needed.
Ha says wanted to give markets a strong message on our determination to control inflation.
Ha says heat coming out of housing market, prices were too high.
NZD/USD update
The Kiwi had opened below 0.67 in an unwind of earlier gains seen on Friday in a response to fresh sanctions against Russia which has diminished risk appetite in general.
''The RBNZ’s tone is secondary at the moment, but to the extent that it matters, our sense is that with them on the front foot, but with other central banks catching up, that potentially speaks to NZD strength fading as the year rolls on. Also in the region this week, watch the RBA (tomorrow); the NZD remains fairly closely correlated to the AUD,'' analysts at ANZ Bank argued.