Currency Talk: RBNZ to hold rates but Wheeler likely to jawbone dollar
ASB's head of FX Tim Kelleher says the central bank will be weary of the high Kiwi Dollar.
What's the story behind the story? Click the NBR Radio box for on-demand special feature audio.
ASB’s head of FX Tim Kelleher says the Reserve Bank will keep the official cash rate on hold this week, and it will be the associated commentary that comes with the decision that will be of the most interest.
“There will be some short, sharp comments with it,” he says.
He says the central bank will be weary of the high New Zealand dollar.
“I would imagine there would be a bit of [jawboning] going on – it won’t be back to the days of ‘unsustainably unjustified’ but it would hint that rate cuts are likely further down the track and the currency is too high and is not helping the economy at this level.”
In international news, China’s central bank cut its benchmark interest rates last week as well as reducing the requirements for a minimum of capital banks are required to keep in the bank.
The US Federal Reserve has a meeting on Thursday morning New Zealand time to determine if the US OCR should be hiked.
But next to no analysts expect US rates to be hiked this week, and there is still scepticism on whether rates will even be hiked this year.
If you are travelling by Air New Zealand this week, remember Koru Lounge wi-fi provides you with FREE access to NBR ONLINE premium content.
NBR Radio
Tue, 27 Oct 2015
Tue, 27 Oct 2015
© All content copyright NBR. Do not reproduce in any form without permission, even if you have a paid subscription.
Currency Talk: RBNZ to hold rates but Wheeler likely to jawbone dollar
52861