Monetary policy announcement from the Reserve Bank of New Zealand
Cut to 2%, as was widely expected
- RBNZ sees 90-day bank bill avg 2.1 pct dec 2016 (pvs 2.2 pct)
- Says further policy easing may be needed
- Sees 90-day bank bill avg 2.0 pct March 2017 (pvs 2.2 pct)
- Monetary policy to remain accommodative
- Sees 90-day bank bill avg 1.8pct June 2017 (pvs 2.1 pct)
- RBNZ says closely watching economic data
- Sees annual CPI +1.0pct December 2016 (pvs +1.3 pct)
- Says a decline in NZD is needed
- Sees TWI NZD at around 75.9 by December 2016
Quick headlines via Reuters
I wrote in my preview that a cut of 25 bps will not be enough to hold the NZD down, the 25 bp cut was widely expected and telegraphed. Any Dip in NZD will be bought. (ADDED - and I should note plenty of traders here were saying the same thing in the comments - kudos all).
1 minute NZD chart:
The move is a good lesson in market dynamics - a surprise cut in rates will have a different impact to a well-telegraphed cut as we've just seen from the RBNZ.
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Still to come:
- Press conference from Governor Wheeler soon (scheduled for 2200GMT)
- And he appears beore a parliamentary committee at 0110GMT