The Reserve Bank Of New Zealand Has The Best Main Interest Rate In 7 Years!!! RBNZ Will Be A Savior From Inflation!?

China’s Caixin Manufacturing PMI Data Might Support The New Zealand Dollar (NZD)

The Reserve Bank of New Zealand today raised its main interest rate by 0.5 percentage points, to 3 percent, a level last seen seven years ago. It was the fourth 50-basis point hike in the current cycle, which may make the RBNZ one of the stronger monetary tightening central banks to bring down inflation.


Today's hike was in line with market expectations. Some policymakers believe that inflation may soon begin to stabilize or even start to decline through lower fuel prices and transportation prices. However, inflation may not return to the New Zealand central bank's target until mid-2024.

Thus, further monetary tightening may be required, with its end expected in the first quarter of 2023 - according to a statement issued to today's decision. As a result, the RBNZ may raise the main interest rate by about 3.75 percentage points throughout the cycle, to 4 percent, from the record low of 0.25 percent that occurred in 2021. Inflation in New Zealand rose to 7.3 percent y/y in the second quarter of 2022, up from 6.9 percent in the previous period. This was the highest figure since the second quarter of 1990.


The NZD/USD exchange rate seemed to react relatively calmly to the above decision, as it was in line with the market consensus. At 07:30 GMT+3 on the Conotoxia MT5 platform, the NZD/USD exchange rate rose by 0.25 percent, to 0.6360. As a result, at this hour, of the major currencies against the US dollar, it is the NZD that seems to have gained the most. Since the beginning of the month, the NZD has gained 1.10 percent to the USD, which may make New Zealand's currency the strongest of the world's major currencies.


Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service)

Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 82.59% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.


Source: Bank of New Zealand with another rate hike

China’s Caixin Manufacturing PMI Data Might Support The New Zealand Dollar (NZD)

Conotoxia Comments

Forex has never been just a job for us. It is our passion to create the best trading conditions for each trader. Chose us and benefit from global trusted brand.