Skip to Content
News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.



Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
Please try again
More View More
New Zealand Dollar Drops After RBNZ Rate Cut

New Zealand Dollar Drops After RBNZ Rate Cut

Ryan Cox, Contributor

Talking Points

  • RBNZ cut its benchmark lending rate to 2.75% as expected
  • New Zealand Dollar fell more than 1.5% versus the US Dollar
  • The central bank appeared to strengthen its dovish outlook

The New Zealand Dollar declined more than 1.5 percent (over 95 pips) versus the US Dollar. The drop came after the Reserve Bank of New Zealand cut its benchmark lending rate from 3.00 percent to 2.75. This highly anticipatedpolicy decision was the third consecutive adjustment since the central bank began easing this year. The last time the RBNZ cut its cash rate for three consecutive meetings was in 2008.

The central bank’s Governor, Graeme Wheeler, stressed that they have the potential to cut rates substantially as needed, with plenty in the tank if things get worse than expected. Indeed, the country currently has a higher interest rate compared to its major peers. The RBNZ’s monetary policy outlook appeared to be more dovish than its July statement. After the rate decision crossed the wires, New Zealand Government bond yields declined across the board. This likely suggests that themarkets are anticipatingfurther easing from the RBNZ in the near-term.

Additionally, Graeme Wheeler said that New Zealand’s economy is adjusting to the sharp decline in export prices, and the consequent fall in the exchange rate. He also stated that the economy is growing at an annual rate of around 2 percent. Furthermore, the Governor noted that export and import-competing sectors are supported by lower exchange rates. Looking abroad, a significant Chinese Yuan devaluation would be a major concern. Further depreciation in the New Zealand Dollar is appropriate.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.