Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


NZ dollar jumps after Wheeler gives less-dovish MPS

NZ dollar jumps after Wheeler gives less-dovish MPS, interest-rate track little changed

Dec. 6 (BusinessDesk) - The New Zealand dollar rose after Reserve Bank governor Graeme Wheeler kept his forecast track for interest rates almost unchanged and gave no signal there’s room for the official cash rate to be cut.

The kiwi dollar rose to 82.81 US cents from 82.49 cents immediately before the monetary policy statement was released. The trade-weighted index rose to 73.84 from 73.68.

Wheeler kept the official cash rate unchanged at 2.5 percent, as expected. He called the strong kiwi dollar a “significant headwind” for the economy and said he would like to see it lower “if we could achieve it without threatening the inflation outlook and financial stability."

While intervention was an options “we have yet to find a situation that meets all of our traffic lights", he said. He trimmed his forecast for 90-day bank bills to 2.7 percent in the fourth quarter of 2013 from the 2.8 percent rate in the September MPS.

“The market was looking for something more dovish and maybe a greater opening for a rate cut,” said Robin Clements, senior economist at UBS New Zealand. “They’ve now concluded that’s not the case,” he said, adding that on first impression the MPS was “reasonably balanced.”

Still, Wheeler won’t rush to raise the OCR, forecasting a gradual rise in inflation to 2 percent, the mid-point of his target range. "The outlook we have is for the OCR to remain stable for quite some period. Our projections don't show an increase until next year, being 2014," he told a briefing after the MPS was released.

The kiwi dollar rose to 79.14 Australian cents from 78.86 cents before the report was released. Wheeler’s statement highlights the contrast with Australia, where the central bank cut its cash rate to 3 percent this week, citing a weak labour market.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Gareth Morgan: The Government’s Fresh Water Policy – Revisited

Fresh water quality is the latest area to be in the sights of Gareth Morgan and his research organisation The Morgan Foundation... They found that the fresh water policy was a bit murkier than the Environment Minister let on. More>>

ALSO:

Interest Rates: RBNZ Hikes OCR To 3.5%, ‘Period Of Assessment’ Now Needed

Reserve Bank governor Graeme Wheeler raised the official cash rate as expected, while signalling a pause in rate hikes to assess the impact of moves so far this year. The kiwi dollar sank after Wheeler said its strength was “unjustified” and that the currency could have “a significant fall.” More>>

ALSO:

Fonterra: Canpac Site 'Resize' To Focus More On Paediatrics

Fonterra is looking at realigning its packing operations at Canpac, in the Waikato, to focus more on paediatric nutritionals... The proposed changes could mean around 110 roles may not be required at the site which currently employs 330. More>>

ALSO:

Scoop Business: Postie Plus Brand Gets 2nd Chance With Well-Funded Pepkor

The Postie Plus brand is getting a new lease of life after South Africa’s Pepkor bought the failed retailer’s assets out of administration and said it will use its purchasing power to reduce costs of stock and fatten margins. More>>

ALSO:

Warming: Warming Signs From State Of Climate Report

Climate data from air, land, sea and ice in 2013 'reflect trends of a warming planet' -- says the latest State of the Climate report, launched by U.S. and New Zealand scientists. More>>

ALSO:

Scoop Business: Embrace Falling Home Affordability, Says NZIER

Despair over the inability to afford a house is misplaced and should be embraced as an opportunity to invest in more wealth-creating activity, says the principal economist at the New Zealand Institute of Economic Research, Shamubeel Eaqub. More>>

Productivity Commission: NZ Regulation Not Keeping Pace

New Zealand regulators often have to work with out-of-date legislation, quality checks are under strain, and regulatory workers need better training and development. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news