RBNZ holds rates steady

  • The Reserve Bank of New Zealand kept interest rates steady at a record low 1.75 per cent, as expected.
  • Graeme Wheeler, the central bank’s governor, said that while the New Zealand dollar had weakened by 4 per cent since February, partly thanks to softer dairy prices, “further depreciation is needed to achieve more balanced growth.”
  • So far this year, the New Zealand dollar is up 1.4 per cent against the greenback.
  • Markets are pricing in a roughly 38 per cent chance the RBNZ will raise interest rates to 2 per cent by the end of this year, and the chances of one 25 basis point rise in 2018 is almost entirely baked in, according to market pricing tracked by Bloomberg.