RBNZ’s explicit easing bias remains - TDS

Sandeep Kanihama FXStreet Contributor

Research Team at TDS, suggests that the RBNZ Governor Wheeler’s speech on “Monetary policy challenges in turbulent times” ruled out the Bank “rapidly” lowering the cash rate as the economy did not need such assistance, exacerbated financial stability risks, and was unlikely to sustainably lower the exchange rate.

Key Quotes

“The RBNZ’s explicit easing bias remains. (i.e. “ … the current interest rate track, involving an expected 35bp of further interest rate cuts”). The RBNZ stated “We anticipate that as our interest rate differentials narrow against other advanced economies, the exchange rate will weaken" ... i.e. this doesn’t just refer to the RBNZ easing further to keep up with Australia, Europe, Japan, etc., but a veiled reference to the U.S. Federal Reserve lifting its cash rate again at some stage.”

Author

Sandeep Kanihama

FXStreet Contributor

Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.

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