Pursuits
New Zealand Bows to Global Easing Pressure Sending Kiwi Tumbling
- Weak inflation expectations may become self-fulfilling: RBNZ
- Central bank forecasts 90-day bill rate at 2.2% by year-end
Graeme Wheeler, governor of the Reserve Bank of New Zealand.
Photographer: Mark Coote/BloombergThis article is for subscribers only.
New Zealand’s central bank unexpectedly cut interest rates to a fresh record low and said further easing may be needed, joining global counterparts in adding stimulus to an economy struggling to generate inflation. The kiwi plunged almost 1 1/2 U.S. cents.
Reserve Bank Governor Graeme Wheeler lowered the official cash rate by a quarter point to 2.25 percent, a move predicted by just two of 17 economists surveyed by Bloomberg. The remainder tipped no change. In recent weeks, a gauge of inflation expectations slumped to a 22-year low and Fonterra Cooperative Group Ltd. cut its forecast milk payment to New Zealand farmers to a nine-year low.