Pursuits
New Zealand Signals Rate on Hold After Cut; Kiwi Climbs
- Expects inflation to return slowly to 2% target midpoint
- Will cuts rates further if circumstances warrant, Wheeler says
The Reserve Bank of New Zealand (RBNZ) headquarters in Wellington, New Zealand.
Photographer: Mark Coote/BloombergThis article is for subscribers only.
New Zealand’s central bank said its fourth rate cut this year should be sufficient to eventually return inflation to target, prompting a surge in the currency as traders bet Governor Graeme Wheeler has reached the end of his easing cycle.
“Monetary policy needs to be accommodative to help ensure that future average inflation settles near the middle of the target range,” Wheeler said Thursday in Wellington after lowering the official cash rate a quarter percentage point to 2.5 percent. “We expect to achieve this at current interest-rate settings, although the bank will reduce rates if circumstances warrant.”