Original title: the first show of the interest rate resolution of the Federal Reserve of New Zealand in 2021. What will be the highlights this time?

The Federal Reserve of New Zealand will release its interest rate resolution and monetary policy statement at 9:00 on February 24th, which will be its first monetary policy decision in 2021. The market now believes that the Fed of New Zealand is expected to keep interest rates unchanged this time as the economy rebounds faster from the epidemic, but there is still a long way to go to tighten policy. ANZ predicts that the New Zealand Fed may raise its forecasts for economic growth, employment and inflation and increase its forward guidance on the official overnight lending rate (OCR), but may stress that it is still a long way from raising interest rates, while the time frame for large-scale asset purchases will be extended until the end of 2022.

All 12 analysts surveyed believe that the Fed of New Zealand will keep interest rates unchanged next Wednesday and will keep the official overnight lending rate (OCR) at a record low of 0.25 per cent for the rest of 2021. Three analysts expect to raise interest rates by the end of 2022, while others think the Reserve Bank of New Zealand will stay put until the fourth quarter of 2022. Westpac is not expected to raise interest rates for the first time until 2024.

Dominick Stephens, chief analyst at Westpac Bank, said: "there is a view in the market that the Fed of New Zealand will raise interest rates, but we do not expect a rate hike until early 2024."

In March 2020, the New Zealand Fed cut interest rates by 75 basis points and said it would leave rates unchanged for 12 months, while also implementing quantitative easing to support an economy hit by the epidemic and border blockades. But a faster recovery in New Zealand's economy and fears that ultra-low interest rates have fuelled a boom in the property market have led to speculation that the easing cycle is over and that interest rate increases may come sooner than expected.

ANZ said in a report that the New Zealand Fed may raise its forecasts for economic growth, employment and inflation and increase its forward guidance on the official overnight lending rate (OCR), but may stress that it is still a long way from raising interest rates and may even give a date.

The report also predicts that the time frame for large-scale asset purchases (LSAP), or quantitative easing, will be extended until the end of 2022.

Sharon Zollner, chief economist at ANZ, believes that overall, the Fed of New Zealand will accept that the outlook is more optimistic and encouraged, but will carefully reconcile these expectations, and achieving the right balance will be a communication challenge.

(daily line chart of New Zealand dollar against US dollar)

At 10:44 Beijing time, the New Zealand dollar was trading at 0.7211 against the US dollar.