10/28/2015, 9:22 PM (Source: TeleTrader)
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New Zealand holds main rate over global economic weakness

The Reserve Bank of New Zealand put slow global economic growth and inflation into main reasons for keeping the main interest rate unchanged at 2.75% on Wednesday. In a statement signed by governor Graeme Wheeler, financial market volatility was said to have decreased lately. However, China and East Asia are the main cause of concern with slower growth, with uncertainty over U.S. central bank's willingness to rise rates, the press release said. Moreover, possible easing of monetary policy is possible elsewhere, Wheeler stated.

There were overall mixed readings from domestic economy, as expansion in services and growth are offset by low inflation, mostly due to fall in prices of oil and national dairy products, the bank concluded. Prices may start to rise early next year as the effect from the energy sector wears off, but there is risk from the New Zealand dollar strengthening further, as it has been appreciating since September, according to Wheeler. 

The country's currency lost 1.07% against the U.S. dollar today, to 0.6693 (9:22 p.m. CET), but it added 5.69% in the past month.


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