The Reserve Bank of New Zealand (RBNZ) released its Sectoral Factor Model Inflation gauge for the second quarter of 2023 this Wednesday.

The inflation data arrived at 5.8% YoY in Q2 2023, unchanged from a 5.8% clip booked in Q1.

According to the latest data published by the New Zealand Statistics (NZ Stats) early Wednesday, New Zealand’s Consumer Price Index rose 6.0% YoY in Q2, slightly higher than the forecasts for a 5.9% increase in the reported period. In the first quarter, the country’s inflation rose to 6.7%.

Both measures are closely watched by the RBNZ.

FX Implications

The Kiwi dollar is holding lower ground after the release of the RBNZ inflation gauge. NZD/USD is trading 0.09% lower on the day at 0.6265, as of writing.

About the RBNZ Sectoral Factor Model Inflation

The Reserve Bank of New Zealand has a set of models that produce core inflation estimates. The sectoral factor model estimates a measure of core inflation based on co-movements - the extent to which individual price series move together. It takes a sectoral approach, estimating core inflation based on two sets of prices: prices of tradable items, which are either imported or exposed to international competition, and prices of non-tradable items, which are those produced domestically and not facing competition from imports.