Pedestrians stroll previous the Reserve Financial institution of New Zealand headquarters in Wellington, New Zealand, on Thursday, Sept. 13, 2012.
Mark Coote | Bloomberg | Getty Photographs
The New Zealand greenback jumped 1% to almost 0.62 in opposition to the U.S. greenback after the Reserve Financial institution of New Zealand held its official money price at 5.5% and warned that charges may go greater to deal with inflation.
The kiwi greenback jumped to its highest stage in almost 4 months after the choice. The foreign money is down 2.5% up to now this yr, and is headed for its third straight yearly decline.
The central financial institution famous that inflation remained too excessive and stated financial coverage might want to stay restrictive to be able to management it.
“The official money price might want to keep restrictive, so demand progress stays subdued, and inflation returns to the 1 to three % goal vary,” the RBNZ stated in its financial coverage assertion.
“If inflationary pressures have been to be stronger than anticipated, the OCR would seemingly want to extend additional.”
This was the fourth straight time the RBNZ held rates of interest regular at a 15-year excessive. The choice was as anticipated by all 28 economists polled by Reuters.
New Zealand’s shopper costs rose at a tempo of 5.6% year-over-year throughout the third quarter.
The benchmark inventory index S&P/NZX 50 rose 0.5% after the rate of interest choice.