The Reserve Bank of New Zealand RBNZ kept its monetary policy and interest rates at its meeting this morning, Wednesday, August 18th, at current levels of 0.25%, compared to market expectations that indicated that the bank would raise interest rates by a quarter point in today’s meeting after the government announced new restrictions.
The fourth level closure on activity across New Zealand due to the Corona virus. The Monetary Policy Committee of the Bank announced that it will periodically assess inflation and employment expectations after the recent halt in additional government bond purchases under the asset purchase program known as LSAP in July.
The Committee believes that maintaining low interest rates will be more effective with the current conditions. The markets were largely anticipating the New Zealand interest rate hike as the first bank to take this step, but with the re-emergence of cases in New Zealand, the decision was postponed from the Reserve Bank of New Zealand, but expectations are still that we will witness a rate hike before the end of this year.
New Zealand recorded about six new cases of infection with the virus this morning, Wednesday, in the first day of the sudden complete closure that was announced yesterday, for three days and seven days in some cities, and the suspension of vaccination for 48 hours after the detection of the first case of infection in nearly six months.
The New Zealand dollar recorded declines against the US dollar after announcing the statement, to test 0.6854 levels, before rising, and trading this morning, Wednesday, at 0.6920 levels.
06/11/2024
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