RBNZ Spencer: comfortable where Kiwi is, not saying 2% is where rates are going

Markets are plugged into the RBNZ presser that follows the RBNZ's interest rate announcements where the bank left the Official Cash Rate (OCR) unchanged at 1.75 percent. The presser started at 21.00GMT. 

Markets had been expecting the RBNZ to recognise the improvements in the economy, dairy prices and how the economy is on track to meeting the RBNZ's 2% inflation target. 

On the decision, the bird subsequently dropped on the outcome of the meeting and looked towards the 0.72 mark, while at the time of writing, the bird is trading at 0.7224, down -1.10% on the day, having posted a daily high at 0.7353 and low at 0.7210.

RBNZ comments:

Spencer: "US dollar has been weak and people surprised by weakness of the dollar."

Spencer: "Why dollar is weak? Does not have a particular answer for that."

spencer: "Not concerned about the NZD, comfortable where it is."

Spencer: "Reason for strength because of the weakness in the dollar."

Spencer: "Not saying 2% is where rates are going."

Spencer: "Expect NZD to drift lower but stay in this vicinity."

Key Notes

  • RBNZ keeps rate unchanged as expected at 1.75%
  • NZD/USD dumps towards 0.7200 on RBNZ unchanged, no jawboning

About the RBNZ interest decision and statement

The RBNZ interest rate decision is announced by the Reserve Bank of New Zealand. If the RBNZ is hawkish about the inflationary outlook of the economy and raises the interest rates it is positive, or bullish, for the NZD. The RBNZ rate statement contains the explanations of their decision on interest rates and commentary about the economic conditions that influenced their decision.