An outside chance of an OCR cut this year

Gareth Kiernan at Infometrics is the only economist predicting the Reserve Bank will cut its official cash rate (OCR) in June but he sees the chances of that diminishing now the currency has come off its highs.

When he made that OCR forecast, and rated it a 70% chance, the currency was trading above 82 US cents; it's now down to just above 76 cents.

Kiernan says he now rates the chances of a cut at about 55%. Such a cut would be more in the nature of an "emergency cut," similar to the one after the February 22 Christchurch earthquake last year, he says. But, like all other economists, he's expecting the OCR to rise next year and has a 25 basis point hike pencilled in for June 2013.

Michael Gordon at Westpac says there's a one in four chance of an OCR cut this year but doesn't think a June 14 (when the next monetary policy statement is due) cut is on the cards because he expects Reserve Bank governor Alan Bollard will await the outcome of the Greek election on June 17.