The Chief Economist of the Central Bank of New Zealand (RBNZ), Yuong Ha told that the latest threat from the coronavirus variant Omicron is unlikely to change the plans of the interest rate hike by the central bank.
In an interview with the Wall Street Journal (WSJ), he said the RBNZ would raise rates even if the variant was known before the central bank’s policy statement.
The current situation is different from August, when the RBNZ had postponed rate hikes due to the Delta variant outbreak that hit the country and the Covid-19 zero-case policy.
However, central banks have now moved to a new coronavirus protection framework, where they will get used to considering Covid-19 as endemic.
Even so, Yuong Ha said it turns out that Omricon poses a big threat, the central bank may take steps to stop the rate hike for a while.
The Omricon Covid-19 variant should have a big economic impact to prevent the RBNZ from further raising interest rates, he added.
While this statement is seen as positive for the New Zealand dollar, the risk -sensitive currency failed to capitalize on it by continuing to trade flat around a nearly 3 -month low against the USD.
