Fitch cuts New Zealand’s outlook to Negative
In a statement released late Friday, Fitch Ratings cut the Outlook on New Zealand's (NZ) Long-Term Foreign-Currency Issuer Default Rating (IDR) to Negative from Stable and affirmed the IDR at 'AA+'.
Key takeaways
A substantial debt reduction is becoming more difficult to envisage, as fiscal consolidation has been delayed in the past few years.
The general government debt-GDP ratio has increased substantially over the past six years as the economy has been buffeted by a number of shocks.
Significant fiscal consolidation measures are likely to occur only after the 2026 election, adding uncertainty to the fiscal outlook.
The Iran war poses risks to the country's economy, given its dependence on energy imports.
NZ Finance Minister Nicola Willis said in a statement that the Negative outlook is a reminder of why fiscal discipline is important.
“The Government remains committed to achieving its three fiscal goals – reducing spending as a proportion of GDP, returning the headline operating balance measure to surplus and bending the debt curve down," she said.
Market reaction
The NZD/USD pair is off the lows, still down 0.05% on the day at 0.5830 as the Gulf war intensifies, while the debt concerns in NZ also weigh.
New Zealand Dollar Price Today
The table below shows the percentage change of New Zealand Dollar (NZD) against listed major currencies today. New Zealand Dollar was the weakest against the Canadian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.07% | 0.05% | -0.06% | -0.14% | 0.15% | 0.05% | -0.03% | |
| EUR | -0.07% | -0.02% | -0.11% | -0.21% | 0.20% | -0.03% | -0.11% | |
| GBP | -0.05% | 0.02% | 0.00% | -0.19% | 0.22% | -0.01% | -0.10% | |
| JPY | 0.06% | 0.11% | 0.00% | -0.06% | 0.21% | 0.04% | 0.02% | |
| CAD | 0.14% | 0.21% | 0.19% | 0.06% | 0.26% | 0.06% | 0.06% | |
| AUD | -0.15% | -0.20% | -0.22% | -0.21% | -0.26% | -0.23% | -0.18% | |
| NZD | -0.05% | 0.03% | 0.01% | -0.04% | -0.06% | 0.23% | -0.04% | |
| CHF | 0.03% | 0.11% | 0.10% | -0.02% | -0.06% | 0.18% | 0.04% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the New Zealand Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent NZD (base)/USD (quote).
Author
Dhwani Mehta
FXStreet
Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.
