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

 

NZ dollar gains after China moves to boost liquidity


By Rebecca Howard

Sept. 9 (BusinessDesk) - The New Zealand dollar gained after China's central bank on Friday said it would cut the amount of cash that banks are required to hold, freeing up liquidity for the economy.

The kiwi was trading at 64.22 US cents at 7:45am in Wellington from 63.82 US cents at 5pm Friday in Wellington and 64.25 US cents late Friday in New York. The trade-weighted index was at 71.42 points from 71.44 Friday in New York.

The People's Bank of China lowered the required reserve ratio for financial institutions by 0.5 percentage points as of Sep. 16, "aiming to further support the development of the real economy and lower financing costs," it said on its web site. It also said rural commercial banks operating solely within provincial administrative regions will have a targeted cut of 1 percentage point in the required reserve ratio. The reduction will be implemented on Oct.15 and Nov. 15, with a cut of 0.5 percentage points each time.

According to Bloomberg, the cuts will release US$126 billion of liquidity.

That "pulling of the monetary stimulus lever" in China saw the kiwi well supported, said Kiwibank FX trader Mike Shirley. The kiwi also benefited when US jobs data came in lower than expectations and when Federal Reserve chairman Jerome Powell reiterated in a speech in Zurich on Friday that the Fed will "act as appropriate" to sustain the country's economic expansion.

The US jobs data showed total nonfarm payroll employment rose by 130,000 in August, and the unemployment rate held at 3.7 percent. Economists polled by Reuters had forecast payrolls rising by 158,000 jobs in August.

"It was not terrible, but not great and was definitely a disappointment," said Shirley. The slower jobs growth coupled with Powell's comments shored up expectations for a Fed rate cut this month. The Fed is due to meet Sep. 17-18.

The New Zealand dollar was trading at 93.89 Australian cents from 93.81 Friday in New York, at 52.32 British pence from 52.21, at 58.23 euro cents from 58.26, at 68.61 yen from 68.69 and at 4.5680 Chinese yuan from 4.5702.

(BusinessDesk)

ends

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Reserve Bank: Official Cash Rate Unchanged At 1 Percent

The Monetary Policy Committee has decided to keep the Official Cash Rate (OCR) at 1.0 percent. Employment remains around its maximum sustainable level while inflation remains below the 2 percent target mid-point but within our target range... More>>

ALSO:

Food Prices: Avocados At Lowest Price In Almost Three Years

Avocados are at their cheapest average price since February 2017, with tomato, lettuce, and cucumber prices also falling, Stats NZ said today. More>>

Auckland Port Move: Cabinet Ministers Deliberate On Report

Cabinet ministers now have a copy of a report urging the government to move the Auckland port up north, but say no final decisions have been made. More>>

ALSO:

Toxicology Tests Planned: Dead Rats Washed Up On Beaches

As many as 600 rats washed up on Westport's North Beach over the weekend to the horror of locals. DOC said they may have been killed by a recent 1080 poison drop 140km away and washed down the Buller River after heavy rain battered the coast. More>>

ALSO: