RBNZ Holds Key Rate as Wheeler Targets Strong Kiwi, Housing
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New Zealand’s central bank expects to keep borrowing costs at a record low this year to avoid re-igniting demand for the currency, which it said remains overvalued. The kiwi declined.
“Despite having fallen over the past few weeks, the New Zealand dollar remains overvalued and continues to be a headwind for the tradables sector,” Governor Graeme Wheeler said in a statement in Wellington today after leaving the Official Cash Rate at 2.5 percent. The bank cut its growth forecast for the year through March 2014 to 3 percent from 3.3 percent, and left its projection for the following year at 2.8 percent.