NZDUSD continues rising supported by the RBNZ’s decisions. The New Zealand Dollar continues rising against the USD in the middle of the week. The current quote for the instrument is 0.6498. The Reserve Bank of New Zealand had another meeting earlier today. the benchmark interest rate was raised from 1.5% to 2.0%, just as expected. In response to the regulator’s consistent monetary policy, the NZD rate rose.
It’s been the second straight meeting of the RBNZ with a rate hike, and probably not the last – the regulator doesn’t want to fall behind other global central banks. Average market expectations imply that the rate might reach 3.4% by the end of 2022. By mid-2023, it might be raised to 3.9%. Earlier, the regulator’s most ambitious scenario said that the rate would be 3.4% by 2024 году and that was expected t be its highest level.
Why the RBNZ is doing this? Just like everyone else – to fight inflation. The current pace of the monetary policy tightening is the most aggressive for the RBNZ over the last years. At the same time, the Kiwi is responding to the strategy quite well.