At its August monetary policy meeting on Wednesday, New Zealand’s central bank, the Reserve Bank of New Zealand (RBNZ), slashed its Official Cash Rate (OCR) by 50bps to a historic low of 1.00%, a bigger-than-expected cut.
The Kiwi slumped more than a big figure to 10-month lows of 0.6445 on the big rate cut.
Minutes of the meetings:
Committee agreed larger initial monetary stimulus would best ensure meeting inflation and employment objectives.
The lower OCR path reflected the economic projections and the balance of risks discussed.
Members noted that estimates of the neutral level of interest rates have continued to decline
Committee noted that low business confidence had dampened business investment in 2018 and had remained weak in mid-2019.
Members noted that heightened global uncertainty was reducing investment and suppressing trading-partner growth.
Members noted this highlighted the risk of a larger or more prolonged slowdown in global economic growth.
Committee agreed that the balance of risks to achieving cpi and employment objectives tilted to the downside.
About RBNZ Interest Rate Decision
RBNZ Interest Rate Decision is announced by the Reserve Bank of New Zealand. If the RBNZ is hawkish about the inflationary outlook of the economy and rises the interest rates it is positive, or bullish, for the NZD.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.