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Commodity price boom may impact on rates

Posted on 12 December 2013

Strong commodity prices, particularly for dairy products, could drive up interest rates more than currently expected if they continue to keep the terms of trade at elevated levels, the Reserve Bank says.
In an alternative scenario in Thursday’s monetary policy statement, the bank projected a more aggressive tightening cycle if global demand for New Zealand exports keeps commodity prices high and maintains an elevated terms of trade………………………………………..Full Article: Source


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