Overall, the statement continues to suggest that the RBNZ is likely to cut rates in the
near future because of the deterioration in inflation expectations, the strong NZD and
deterioration in the global outlook. Moreover, it is also evident that in the RBNZ views
most of the risks to the outlook as being to the downside. With all this in mind, we think it
looks very likely that the RBNZ will cut rates. The timing will depend on incoming data—
particularly inflation expectations, the level of the exchange rate and dairy prices—but
we believe a cut at the June meeting looks likely.