HiFX Data Update - RBNZ cut rates by 0.25% to 2.50%

HiFX Data Update - RBNZ cut rates by 0.25% to 2.50%

The RBNZ have cut the Official Cash Rate (OCR) by 0.25% to 2.50%.

The key points in the RBNZ statement are:

• Reserve Bank of NZ cuts Cash Rate target 25 bps to 2.50%
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• Interest rates are currently stimulatory
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• New Zealand economy softened this year
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• Softening NZ economy due mainly to lower terms of trade
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• Spare economic capacity, unemployment higher
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• Will cut rates again if circumstances warrant
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• Any future cash rate cuts will depend on economic data
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• Says risks that dairy prices remain weak
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• House price inflation in Auckland strong, financial stability risk
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• Concerns about hard landing in China growth have reduced
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• Strong NZD 'unhelpful' and further depreciation would be appropriate
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The NZD dipped lower in initial reaction, only to reverse direction and race higher (above 0.6700) in volatile trading.

The next OCR decision will be held on 28th January 2016.

Below is link to the full RBNZ statement:

http://www.rbnz.govt.nz/news/2015/mps-10-dec-2015.html

Current indicative levels are:
NZD-USD 0.6675 / 0.6700
NZD-AUD 0.9250 / 0.9275
NZD-EUR 0.6060 / 0.6085
NZD-GBP 0.4400 / 0.4425
NZD-JPY 81.00 / 81.25

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