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RBNZ Cuts Official Cash Rate 0.25% to 3.25%

 

The Reserve Bank of New Zealand cuts its main bank rate for the first time since 2011 ending a rate hike cycle that began in January 2014 at 2.5 percent and halted at 3.5 percent that July.

While the move had been expected the New Zealand Dollar dropped almost two figures against the U.S. Dollar from 0.7202 to 0.7019 in the initial reaction before stabilizing around 0.7050.

The RBNZ statement suggested that further easing could be ahead saying the NZD was still overvalued. However given the rapid move down after the announcement kiwi losses from here may be limited.

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Charts: Bloomberg

nzd june 10

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