Reserve Bank of New Zealand

New Zealand Gets an Interest Rate Cut of 25 Basis Points

November 10, 2016

The Reserve Bank of New Zealand’s new Official Cash Rate level is 1.75%, the lowest ever, and this third such cut in 2016 was largely motivated by a need to depreciate the kiwi, which has become “higher than is sustainable for  balanced economic growth” and because an overvalue currency is depressing inflation associated with tradable […] More

Reserve Bank of New Zealand: No Rate Change this Time but More Ease Possible in the Future

September 22, 2016

New Zealand’s Official Cash Rate, which had been cut this year by 25 basis points each in March and August, was left at the record low of 2.0%. There also had been four 25-bp reductions during 2015 and four increases of like amount during 2014. A statement released by Governor Wheeler today reiterated that the […] More

Central Banks Setting the Market Tone

September 22, 2016

Yesterday’s eagerly awaited Federal Reserve and Bank of Japan meetings have been followed today by monetary policy decisions in New Zealand, Norway, The Philippines, Indonesia and Turkey with South Africa and public comments from ECB President Draghi still to come. Overall, the tone from central banks has been dovish, creating incentives for funds to gravitate […] More

New Zealand’s Official Cash Rate Sliced 25 Basis Points to 2.0%

August 10, 2016

Four  sentences from a statement released by the Reserve Bank of New Zealand explain why the OCR was cut today and the likely direction of the next interest rate change. Weak global conditions and low interest rates relative to New Zealand are placing upward pressure on the New Zealand dollar exchange rate. Headline inflation is being […] More

Reserve Bank of New Zealand Retains Record Low 2.25% Cash Rate

June 9, 2016

At a second straight monetary policy meeting, New Zealand’s official cash rate was not changed.  Beginning at the year-earlier meeting in June 2015, five reductions were engineered by March 2016, and these more than reversed the four 25-basis point tightenings to 3.5% between March 2014 and July 2014.  A statement explaining today’s decision talks about […] More

Reserve Bank of New Zealand: No Changes

April 27, 2016

New Zealand’s Official Cash Rate was left at 2.25%, and a released statement said the kiwi remains overvalued, inflation is low, and that “further policy easing may be required to ensure that future average inflation settles near the middle of the target range.”  The OCR was sliced by 25 basis points at the last meeting […] More

Euro Rises on ECB Announcements

March 10, 2016

The ECB Governing Council announced a more aggressive package of stimulants than analysts were expecting. All ECB central bank interest rates including the main refinancing rate were lowered. The size of monthly quantitative asset purchases was increased 33% to EUR 80 billion and will run at least through end-2017. The types of eligible assets in […] More

New Zealand’s Official Cash Rate Cut to 2.25% from 2.50%

March 9, 2016

New Zealand’s central bank interest rate had been reduced four times in 2015.  Each time the cut was by 25 basis points, and the last move in December returned the rate level to its Great Recession low of 2.50%.  A fifth cut announced today had not been anticipated by most analysts and establishes a new record […] More

New Zealand’s Central Bank Leaves Cash Rate at 2.5% and Delivers Dovish Statement

January 27, 2016

The statement from the Reserve Bank of New Zealand arrived an hour after the FOMC statement and reveals more about the market’s angst over Fed tightening than about New Zealand.  Both central banks left key interest rates unchanged in January, which wasn’t a great surprise since each had changed rate levels at the previous policy […] More

Reserve Bank of New Zealand Official Cash Rate Is Cut

December 9, 2015

The OCR as expected was cut by 25 basis points to 2.5%, thus returning for a third time to the low level first observed from March 2009 until October 2010 and subsequently from March 2011 to March 2014.  Following four 25 basis point hikes in 2014, today’s action represents the fourth 25-basis point cut this […] More