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Most important among those developments were the precipitous falls in dairy and log export prices.
''This is quite different to the period of falling dairy prices in March and April. They were anticipated by the Reserve Bank whereas the latest episode was not.
"To make matters worse for exporters, the exchange rate is even higher than it was early in the year.''
On the domestic front, the economy had lost some of its considerable momentum and the Consumers Price Index failed to produce a ''smoking gun'' of accelerating non-tradeables inflation, he said.
Fixed mortgage rates, which had been too low for the Reserve Bank's liking, had risen sharply.
The solitary upside development of the past few weeks had been net immigration which had again turned out stronger than the Reserve Bank anticipated, Mr Stephens said.
After mulling over the plethora of downside developments, Mr Stephens was sure the Reserve Bank would conclude the requirement for OCR rises had eased, but had not been eliminated.
The June Monetary Policy Statement showed the Reserve Bank expected to raise the OCR by 1.5% over the next two years.
The requirement might now be for a rise of only 1.25%.
The latest data developments might provide discussion within the Reserve Bank whether the OCR rise on Thursday was still warranted.
However, the Reserve Bank was likely to proceed and increase the OCR by 0.25% to 3.5%, he said.
Among the reason for the lift were the current central bank administration had built an ''admirable record'' of clear and accurate communication regarding further OCR changes.
Failing to lift on Thursday would risk squandering that hard-won credibility.
The Reserve Bank had always maintained its raising cycle would be ''front loaded'' - OCR rises would be rapid at first and slow later. There was no reason to shy away from that strategy, Mr Stephens said.
''Although we expect the Reserve Bank to persist with its hike, the recent bout of weaker data has strengthened the case for a pause in the OCR cycle beyond July. Such a pause was always in the Reserve Bank's plan.''
At the end of the year, Westpac expected inflation to be still at 1.6%, below the Reserve Bank's target of 2%.
The housing market was unlikely to rebound as vigorously as the Reserve Bank feared, he said.
The OCR was likely to remain at 3.5% from July until January.
Following the July OCR review, the Reserve Bank might consider intervening in foreign exchange markets by selling New Zealand dollars, Mr Stephens said.
That would address the real nub of the central bank's current problem of the exchange rate refusing to fall even as export conditions were deteriorating.
The Reserve Bank had often mentioned it would prefer a different mix of monetary conditions, involving higher interest rates to restrain the housing market and a lower exchange rate.
At a glance
• OCR to rise to 3.5% on Thursday
• Pause in rate rises until January
• Communicating a pause may prove problem for Reserve BankCurrency intervention not ruled out