New Zealand’s First Interest Rate Cut of the Cycle – Currency Thoughts
New Zealand’s First Interest Rate Cut of the Cycle
August 14, 2024
There’s been a 25-basis point reduction in the Reserve Bank of New Zealand’s official cash rate to 5.25%. Its the first easing of the cycle and was not widely expected by analysts. “Surveyed inflation expectations, firms’ pricing behavior, headline inflation, and a variety of core inflation measures are moving consistent with low and stable inflation,” according to a released statement. As in many economies, service sector prices continue to lag other items in the disinflationary process. The CPI target of the RBNZ is a range of 1-3%, and inflation last quarter of 3.3% was down from 4.0% in the first quarter and 7.3% in the second quarter of 2022. New Zealand stock market rallied but the kiwi fell following announcement of the rate cut. The OCR had been at 5.50% since a 25-basis point increase in May 2023 but remains far above the pandemic low of 0.25% maintained from March 2020 until October 2021.
Copyright 2024, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: Reserve Bank of New Zealand
ShareThisYou can leave a response, or trackback from your own site.
Leave a Reply
You must be logged in to post a comment.
