FX News: RBNZ Keeps Monetary Policy Steady
FX News – The Reserve Bank of New Zealand kept its official cash rate (OCR) at 1.0%. This comes in line with the market’s expectations.
However, the bank also said there was scope for further fiscal and monetary stimulus. Such measures will help bolster the economy that faces worsening global tensions trade conflicts.
The NZ dollar gained against the US dollar after the news. It rose 0.2% to 0.6331. Meanwhile, the Australian dollar slipped 0.2% to 0.6788.
The US dollar index, measuring the buck’s strength against other peers, gained 0.2% to 98.107. Dollar investors are watching US developments after House Speaker Nancy Pelosi announced an impeachment inquiry into President Donald Trump.
The safe-haven yen, meanwhile, slipped too. The dollar gained 0.2% against it, reaching 107.28. The British pound dropped 0.2% to 1.2466, after the UK Supreme Court ruled Boris Johnson guilty of unlawful act.
Kiwi Monetary Policy on FX News
With regards to RBNZ’s monetary policy, the RBNZ said that new information since the August decision did not warrant a huge change.
According to the record of the meeting, the monetary policy committee said that employment remains to maximum levels. However, consumer price inflation was still lower than the 2% target.
The RBNZ now has two mandate: to support maximum sustainable employment and keep annual inflation in target. Over the medium term, the target is between in 1% and 3%. Annual inflation is presently at 1.7%.
It said that global interest rate levels are at historically low levels. This comes in line with low inflation and low growth rate predictions for the future.
That means the country’s interest rates will stay low for longer. The committee members expect positive results from economic activity over the coming year from the monetary stimulus.