Central Bank May Encourage Depreciation of New Zealand Dollar

The New Zealand dollar dropped today on the concern about the impact of Germany’s ban of short selling on the European economy and after the Governor of the central bank said that the gradual depreciation of the currency is desirable.
The statements of the New Zealand’s central bank policy makers caused speculation that the bank isn’t going to increase the interest rate soon and that they may encourage the depreciation of the currency. Alan Bollard, the Governor of the Reserve Bank of New Zealand, said:

A gradual depreciation of the New Zealand dollar remains desirable for a sustainable rebalancing of the New Zealand economy, as it would boost export returns and discourage household spending on imports.

NZD/USD traded today near 0.6786 as of 12:52 GMT, rising from its opening price of 0.6936.

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