Sharjah24 - Reuters: Financial markets have revised down their expectations for interest rate increases as a result of expected harm to New Zealand's economy from recent severe weather.
An initial disaster, flash flooding in Auckland, New Zealand's largest city, hit on Jan. 27. Then on Feb. 12 to 15 a cyclone hit the North Island, which includes Auckland.
"As the scale of the devastation has been gradually revealed, the market has all but priced out the chance of the RBNZ going ahead with the 75bp hike it signalled last November," said ANZ chief economist Sharon Zollner in a note, referring to the Reserve Bank of New Zealand (RBNZ).
"Indeed, it's now pricing a small chance of a pause or just a 25bp hike next week, which is fair," she added.
The flash flooding damaged roads across Auckland, closed businesses including the airport, destroyed houses, roads and crops. The cyclone then damaged still more roads, many of which are still closed, swept away rail track and grounded flights. Homes are flooded and communities cut off.
Tanker trucks cannot collect milk, some logging is suspended, and meat processing is reduced.
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