Following the release of the official consumer price index (CPI) by NZ Stats early Friday, the Reserve Bank of New Zealand (RBNZ) issued its Sectoral Factor Model Inflation gauge for the second quarter of 2021.
In Q2, the gauge increased by 2.2 percent year over year, up from 2.0 percent the previous quarter. The first-quarter number was raised up to 2.0 percent YoY from 1.9 percent the previous quarter.
The RBNZ, which has a monetary policy goal of achieving 1% to 3% inflation, keeps a constant eye on the inflation gauges.
As NZD/USD comes back to reach the day highs around 0.7022, the Kiwi dollar catches a fresh bid on the RBNZ’s inflation gauge. On the day, the spot is up 0.50 percent.
The Reserve Bank of New Zealand uses a number of models to estimate core inflation. The sectoral factor model calculates core inflation using co-movements, or how closely individual price series move together. It employs a sectoral method, measuring core inflation using two sets of prices: tradable products, which are those that are either imported or subject to international competition, and non-tradable items, which are those that are manufactured domestically and are not subject to import competition./n
