S&P affirms New Zealand’s ‘AA’ credit rating, keeps outlook stable

The Standard & Poor's, credit rating agency affirmed New Zealand's ‘AA’ foreign currency rating and AA+ local currency long-term sovereign credit rating and said its outlook remains stable.

The Standard & Poor said in an emailed statement the Pacific nation had monetary and fiscal flexibility and a resilient economy, though its high external debt offset these strengths, Reuters reported.

The rating affirmation on New Zealand reflects the country's monetary and fiscal policy flexibility, economic resilience, and public policy stability.  Moderating these strengths are New Zealand's very high external imbalances,  its high household and agriculture sector debt, its dependence on commodity income, and risks to its financial system stability, reported Standard & Poor in its press release.

Underpinning the ratings on New Zealand are its strong institutions. We believe that the checks and balances in government are effective, and New Zealand ranks near the top of many surveys on governance, government efficiency, and business promotion. The Reserve Bank of New Zealand has strong credibility regarding its inflation mandate and its supervisory role, they added.

Meanwhile, the New Zealand’s benchmark S&P/NZX50 Index closed 0.20 percent lower at 7,048.47, while at 5:00 GMT, the FxWirePro's Hourly NZD Strength Index remained neutral at 58.68 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex