8/10/2016, 11:16 PM (Source: TeleTrader)
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New Zealand slashes main rate by 0.25 points

Central bankers led by governor Graeme Wheeler reduced the official cash rate controlled by the Reserve Bank of New Zealand from 2.25% to 2% on Wednesday, following repeated hints about the need for looser policy. The statement cited political risks, global growth "below trend despite being supported by unprecedented levels of monetary stimulus" and long-term rates at record lows. 

The move comes after the Australian central bank slashed its main gauge to a historic minimum of 1.5% at the beginning of the month. The rate-setters in New Zealand responded accordingly, explaining the domestic currency is under upward pressure and that, together with the effects of slow increases in prices on a global scale which is causing negative inflation. Special concern was expressed for the dairy sector. On the other hand, inflation in the housing sector remained excessive, the document said. 

The New Zealand dollar spiked 1.22% against its counterpart in the United States and rallied 0.96% versus the Japanese yen. It jumped 0.84% compared to the Australian currency (all 11:16 p.m. CET).

Breaking the News / IT