FXStreet reported the New Zealand dollar near US$0.5700 in early Asian trading in a report published at 10:30 p.m. ET Sunday (02:30:59 GMT Monday), ahead of the central bank’s Oct. 28 decision.
The figure was an intraday market quote. The Reserve Bank of New Zealand’s (RBNZ) published reference rate was US$0.56890 per New Zealand dollar on Oct. 23, a separate reading from the earlier date.
Brown Brothers Harriman (BBH) said swaps pricing implied an 88% chance of a 25-basis-point rate increase on Wednesday, which would lift the Official Cash Rate (OCR) to 3.00%. BBH put the odds at 85% in its Oct. 22 analysis. These are market estimates; the RBNZ has said its future rate path is not predetermined.
The RBNZ raised its OCR to 2.50% in July and 2.75% in September. Another quarter-point increase would be the third consecutive hike.
Stats NZ reported that consumer prices rose 3.7% in the 12 months to the September quarter, down from 4.1% in the year to June. Prices increased 0.7% over the quarter. Annual inflation remained above the RBNZ’s 1% to 3% target, although it was below the bank’s 3.9% forecast for the quarter. The share of items in the consumer price basket that rose by more than 3% over the year increased to 54.9%, from 38.5% in the year to June. EconoTimes previously covered September inflation and broad price increases.
In its September monetary policy statement, the RBNZ said, “We may need to increase the OCR further this year.” The bank says rate changes affect mortgage, business-loan and savings rates. Higher borrowing costs can weigh on household and business spending, while savers may receive higher returns.
The RBNZ’s next policy review is scheduled for Wednesday, Oct. 28.
