The New Zealand dollar fell intraday after the nation’s central bank proposed to raise capital requirements for New Zealand’s top banks, leading to speculations that an interest rate cut may follow. The currency has rebounded by now, though, even gaining against some of its rivals.
The Reserve Bank of New Zealand proposed to raise capital requirements for the nation’s four biggest banks as a measure “of levelling the playing field.” In response to concerns that it may create tighter financial conditions, RBNZ deputy governor Geoff Bascand said:
Interest rates (borrowing and lending) could change â but we don’t expect by much.
Nevertheless, he also suggested that the central bank may loosen its monetary policy further if need be.
NZD/USD opened at 0.6798, fell to the daily low of 0.6757 during the trading session, but bounced to 0.6803 by 11:55 GMT today. NZD/JPY edged up from the open of 75.25 to 75.43 after falling to the session minimum of 74.83 earlier.
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