New Zealand’s dollar sank to its lowest in three weeks as the central bank moved to rein in the nation’s housing boom in a move seen as paving the way for Governor Graeme Wheeler to cut borrowing costs next month to tackle weak inflation.

The kiwi is the worst-performing currency among the 16 major currencies in the past week. The Reserve Bank of New Zealand said Tuesday investors in the housing market across the country will need to have a deposit of at least 40 percent. Wheeler has been reluctant to drop borrowing costs for fear of stoking housing demand.

“The very tight timeline proposed for implementing the added restrictions reinforces the likelihood of the RBNZ cutting in August especially following softer New Zealand second quarter inflation,” said Elias Haddad, a senior currency strategist at Commonwealth Bank of Australia in Sydney.

New Zealand’s currency dropped 1.1 percent to 70.34 U.S. cents at 10:06 a.m. in Sydney, heading for the lowest close since June 27. Australia’s dollar slipped 0.3 percent to 75.67 U.S. cents.

Swaps traders are pricing in a 79 percent chance of a rate cut by New Zealand’s central bank on Aug. 11, compared with 55 percent at the start of the month.

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