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New Zealand Debt Management
Investor Update
September 2022

The Investor Update is a monthly publication that provides a quick snapshot of the New Zealand economy, the fiscal outlook, monetary policy and the New Zealand Government Debt Market. 

Monetary policy update

The Reserve Bank of New Zealand (RBNZ) lifted the Official Cash Rate (OCR) to 3.0% at the August Monetary Policy Statement (MPS) and indicated that the OCR could rise to 4.1% in the June 2023 quarter.

In the Reserve Bank’s assessment, domestic demand remains robust as acute supply constraints persist, most notably in the labour market, and domestic core inflation is broad-based and well above the 1-3% target. June quarter’s annual inflation rate of 7.3% was higher than the Bank expected (7.0%), leading to upward revisions in the inflation forecast, requiring a higher OCR to bring inflation back within the target range. The higher OCR is accompanied by a more pronounced slowing in economic activity than previously forecast, and a higher unemployment rate.
For further up to date economic indicators read the Treasury’s latest Fortnightly Economic Update.
Figure 1: Official Cash Rate
Source: Treasury, RBNZ

New Zealand Government Bond Market Developments

On 24 August, New Zealand Debt Management (NZDM) completed a syndicated tap of the 20 September 2035 inflation-indexed bond (IIB). A total of NZ$2.5 billion was issued which took place concurrently with a NZ$1.5 billion repurchase of the 20 September 2025 IIB. The final investor order book for the tap stood at just over NZ$3.5 billion. This was made up of existing and new investors to NZ IIBs, domiciled in both New Zealand and offshore (Figure 2), aligning with our objective of maintaining a diversified global IIB investor base. In addition, the concurrent repurchase and tap has contributed to investors recycling capital out the IIB yield curve.
There will be no further issuance of the 20 September 2035 IIB prior to November 2022.

Figure 2: Investor location - 2035 IIB Tap Syndication
Source: Treasury
The recently published September tender schedule stated that IIB tenders are scheduled for 8 September 2022 and 22 September 2022.  As per standard practice, IIB demand from market participants will be assessed on the Monday prior to a scheduled IIB tender. The information received will contribute to the decision to hold that tender, and the volume and the IIB maturity date(s) to be offered. If your organisation would like to provide feedback, please mail or NZDM would be happy to facilitate a call if preferred.

The New Zealand Government Securities Funding Strategy 2022/2023 (Edition 1) is now available on the NZDM website

Upcoming Events

- Green Bond Syndication - Prior to 31 December 2022
- New Zealand Nominal Bonds added to the FTSE-Russell World Government Bond Index (WGBI) - 1 November 2022

Contact us
This E-Newsletter has been prepared by the Treasury on behalf of the New Zealand Government and is for general information purposes only. By reading the E -Newsletter materials, you acknowledge and agree to the contents of following disclaimer.
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New Zealand Debt Management
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New Zealand

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