Economists expect the Reserve Bank will raise interest rates for a third time this year on Thursday but the outlook further on is considerably murkier.
Photo: RNZ
A Reuters survey of 17 economists found all are expecting a 25 basis point increase in the central bank's official cash rate to 3.25 percent this week.
From there, some economists are expecting no change for the rest of this year, while others are expecting the Official Cash Rate (OCR) to rise as high as 4 percent.
Deutsche Bank economist Darren Gibbs said the Reserve Bank had made it clear it wanted to move the OCR to more normal levels to ensure inflation remained in check.
He said the bank would not be likely to signal its intentions at the July meeting because it would probably want to want to keep its options open.
"I think the market may be a little disappointed in that regard and in particular I think the market may be a little disappointed that the Reserve Bank is not a little more dove-ish than it was when we last heard from them back in April."
Mr Gibbs said the market had played a lot of attention to the more negative views such as the price of the currency and the fall in dairy prices.
But at the same time fiscal policy had eased a little and migration numbers were positive, so he believed the Reserve Bank would be slightly less hawkish.
