NZD Currency - The Reserve Bank has maintained the official cash rate at 5.5 percent, but this policy has softened slightly, with new forecasts indicating the possibility of adjustments occurring sooner. RBNZ Governor Adrian Orr stated that the New Zealand economy is developing as expected; however, overall inflation remains above the target range of 1-3 percent, limiting tolerance for rising inflation.

According to ASB Chief Economist Nick Tuffley, the policy is not overly hawkish, with risks appearing more balanced. The OCR path has been revised slightly downward in the short term but still reflects the possibility of interest rate hikes throughout 2024 and a reduction in the second quarter of 2025.

Inflation is projected to return to the 1-3 percent target range by September 2024, reaching 2 percent by December 2025, slower than previous estimates. ASB predicts a cut in the OCR by the RBNZ in November, which could lead to a sharp decline in the New Zealand dollar and wholesale interest rates.

The central bank has painted a somewhat gloomy picture of the global economy, with slowing growth and geopolitical risks, but some benefits for New Zealand. Although import price inflation may moderate, the RBNZ emphasizes the need to maintain the OCR at a restrictive level to achieve the 1-3 percent inflation target. Annual inflation, measured by the CPI, reached 4.7 percent in the last three months of 2023, and the correlation between the OCR and bank interest rates creates uncertainty regarding its impact.

Read Also :

Analysis of NZDUSD Price: Currency Pair Drops for 5 Consecutive Times!

Warning!

This is today's forex news regarding "RBNZ Maintains Interest Rate at 5.5%, NZD Currency Declines!" based on perspectives from fundamental and technical analyses from reliable sources, and does not constitute advice or solicitation. Always remember that this content aims to enrich readers' information. Always conduct independent research regarding other forex information to serve as a reference in your trading.

Get updated news and articles from GIC Indonesia, which you can check on Google News every day to know the latest updates in the world of forex and crypto. Trade also at GICTrade using an ECN account to enjoy trading with low spreads starting from zero!