The New Zealand dollar declined against the US dollar and the euro today after the nation’s central bank left monetary policy unchanged but maintained its easing bias.
The Reserve Bank of New Zealand kept its main interest rate at 2% at today’s policy meeting. Nevertheless, the central bank was dovish in its statement and continued complain about the strength of the currency:
The high exchange rate continues to place pressure on the export and import-competing sectors and, together with low global inflation, is causing negative inflation in the tradables sector. A decline in the exchange rate is needed.
The RBNZ concluded the statement with hints of future monetary easing:
Our current projections and assumptions indicate that further policy easing will be required to ensure that future inflation settles near the middle of the target range.
NZD/USD dropped from 0.7353 to 0.7313 as of 16:55 GMT today. EUR/NZD rallied from 1.5202 to 1.5345, rising for the first day in seven.
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