Created
: 2025.01.29
- English
- English
- What's Myforex
- Share
- Use tools
- Get information
- What's New
- Help center
- About us
- Customer support
- Terms and policies
-
-
PortfolioShare your portfolio and performance in real time -
Events & contestsEvents and contests held by retail brokers around the world
-
-
Real-time spread comparisonCompare spreads of major retail brokers in real time -
Volatility analysisVisualize volatility as a measure of daily market activity -
Swap point comparisonCompare buy and sell swap values for each broker by symbol -
Market rates & chartsCheck prices for all instruments offered by each broker -
IndicatorsProviding in-house developed indicators for MT4/MT5 -
Trading calculatorsCalculation tools for each broker to help you trade
-
-
World FX newsLatest news on forex and cryptocurrencies from around the world -
Broker informationTrading information of retail brokers worldwide -
MetaTrader4/5 user guideUser guide collection for the latest MetaTrader4/5 -
Economic calendarRelease calendar for indicators from official sources of major economies
RBNZ's Conway: Interest rates moving toward neutral
Breaking news
RBNZ's Conway: Interest rates moving toward neutral
New
2025.01.29 08:17
2025.01.29 08:17
2025.01.29 08:17
Reserve Bank of New Zealand Chief Economist Paul Conway said late Tuesday that the interest rate will tend towards neutral in the absence of future shocks to the system as pandemic-related disruptions fade, per Reuters.
Key quotes
Given uncertainty, we will need to 'feel our way' as the (official cash rate) gets closer to our estimate of neutral.
At 4.25%, the OCR is currently still restrictive, against Reserve Bank estimates of the long-term nominal neutral interest rate being between 2.5% and 3.5%.
With declining inward migration and weak productivity growth, potential output growth is likely to be modest.
The Monetary Policy Committee is confident that remaining persistent domestic inflation pressures will abate.
Easing domestic pricing intentions and a drop in inflation expectations will help open the way for some further easing of the OCR, as signalled in November.
Market reaction
At the time of writing, the NZD/USD pair is trading 0.08% lower on the day to trade at 0.5665.
RBNZ FAQs
The Reserve Bank of New Zealand (RBNZ) is the country's central bank. Its economic objectives are achieving and maintaining price stability - achieved when inflation, measured by the Consumer Price Index (CPI), falls within the band of between 1% and 3% - and supporting maximum sustainable employment.
The Reserve Bank of New Zealand's (RBNZ) Monetary Policy Committee (MPC) decides the appropriate level of the Official Cash Rate (OCR) according to its objectives. When inflation is above target, the bank will attempt to tame it by raising its key OCR, making it more expensive for households and businesses to borrow money and thus cooling the economy. Higher interest rates are generally positive for the New Zealand Dollar (NZD) as they lead to higher yields, making the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken NZD.
Employment is important for the Reserve Bank of New Zealand (RBNZ) because a tight labor market can fuel inflation. The RBNZ's goal of "maximum sustainable employment" is defined as the highest use of labor resources that can be sustained over time without creating an acceleration in inflation. "When employment is at its maximum sustainable level, there will be low and stable inflation. However, if employment is above the maximum sustainable level for too long, it will eventually cause prices to rise more and more quickly, requiring the MPC to raise interest rates to keep inflation under control," the bank says.
In extreme situations, the Reserve Bank of New Zealand (RBNZ) can enact a monetary policy tool called Quantitative Easing. QE is the process by which the RBNZ prints local currency and uses it to buy assets - usually government or corporate bonds - from banks and other financial institutions with the aim to increase the domestic money supply and spur economic activity. QE usually results in a weaker New Zealand Dollar (NZD). QE is a last resort when simply lowering interest rates is unlikely to achieve the objectives of the central bank. The RBNZ used it during the Covid-19 pandemic.
Last updated
: 2025.01.29
Related articles
GBP/USD Price Forecast: Bearish outlook remains in play below 1.2450
2 minutes agoUSD/CHF remains steady near 0.9050 ahead of Swiss Trade Balance data
24 minutes agoEUR/JPY attracts some sellers to near 161.00, ECB rate decision in focus
55 minutes agoEUR/USD holds steady above 1.0400; looks to ECB for fresh impetus
2025.01.30 13:55EUR/USD holds gains above 1.0400 ahead of GDP Q4, ECB policy decision
2025.01.30 13:41India Gold price today: Gold rises, according to FXStreet data
2025.01.30 13:35
FXStreet is a forex information website, delivering market analysis and news articles 24/7.
It features a number of articles contributed by well-known analysts, in addition to the ones by its editorial team.
Founded in 2000 by Francesc Riverola, a Spanish economist, it has grown to become a world-renowned information website.
Was this article helpful?
We hope you find this article useful. Any comments or suggestions will be greatly appreciated.
We are also looking for writers with extensive experience in forex and crypto to join us.
please contact us at [email protected].
Thank you for your feedback.
Thank you for your feedback.
Most viewed
GBP/USD Price Forecast: Bearish outlook remains in play below 1.2450
The GBP/USD pair trades with mild gains around 1.2445 during the early European trading hours on Thursday.
New
2025.01.30 15:08USD/CHF remains steady near 0.9050 ahead of Swiss Trade Balance data
USD/CHF steadies after two consecutive days of gains, trading around 0.9070 during the Asian session on Thursday.
New
2025.01.30 14:47EUR/JPY attracts some sellers to near 161.00, ECB rate decision in focus
The EUR/JPY cross extends the decline to near 161.05 during the early European session on Thursday.
New
2025.01.30 14:16EUR/USD holds steady above 1.0400; looks to ECB for fresh impetus
The EUR/USD pair struggles to capitalize on the overnight bounce from the 1.0380 area or the weekly low and oscillates in a narrow band during the Asian session on Thursday.
New
2025.01.30 13:55EUR/USD holds gains above 1.0400 ahead of GDP Q4, ECB policy decision
EUR/USD inches higher after three consecutive losses, trading around 1.0420 during Asian hours on Thursday.
New
2025.01.30 13:41India Gold price today: Gold rises, according to FXStreet data
Gold prices rose in India on Thursday, according to data compiled by FXStreet.
New
2025.01.30 13:35Gold price trades with mild positive bias, seems poised to climb further
Gold price (XAU/USD) ticks higher during the Asian session on Thursday, though it lacks follow-through and remains confined in the weekly range amid mixed fundamental cues.
New
2025.01.30 13:22Japan's Hayashi: Monitoring the Fed decision impact on the economy
Japan's Chief Cabinet Secretary Yoshimasa Hayashi said on Thursday, he is "monitoring the Fed decision impact on Japan's economy as the US is Japan's largest outbound investment destination." Additional comments Will to finalize timing of meeting between Japanese PM Shigeru Ishiba and US President Donald Trump.
New
2025.01.30 12:52RBA Bulletin studies how changes to interest rates affect economic activity and inflation
The Reserve Bank of Australia published its January 2025 Bulletin, including an in-depth explainer on how: Changes to monetary policy affect interest rates in the economy.
New
2025.01.30 12:47Silver Price Forecast: XAG/USD rises to near $31.00 amid dovish signals from central banks
Silver price (XAG/USD) extends its winning streak for the third consecutive session, trading around $30.90 per troy ounce during Asian trading hours on Thursday.
New
2025.01.30 12:37Disclaimer:
All information and content provided on this website is provided for informational purposes only and is not intended to solicit any investment. Although all efforts are made in order to ensure that the information is correct, no guarantee is provided for the accuracy of any content on this website. Any decision made shall be the responsibility of the investor and Myforex does not take any responsibility whatsoever regarding the use of any information provided herein.
The content provided on this website belongs to Myforex and, where stated, the relevant licensors. All rights are reserved by Myforex and the relevant licensors, and no content of this website, whether in full or in part, shall be copied or displayed elsewhere without the explicit written permission of the relevant copyright holder. If you wish to use any part of the content provided on this website, please ensure that you contact Myforex.
Myforex uses cookies to improve the convenience and functionality of this website. This website may include cookies not only by us but also by third parties (advertisers, log analysts, etc.) for the purpose of tracking the activities of users. Cookie policy
