New Zealand’s dollar extended losses to the second consecutive day versus its American counterpart after the central bank cut its benchmark interest rate to a fresh record low on Thursday.
Speaking in a conference after lowering the official cash rate to 1.75 percent, Reserve Bank Governor Graeme Wheeler said that the RBNZ might not need another cut, but left the door for further stimulus open, saying “numerous uncertainties remain, particularly in respect of the international outlook, and policy may need to adjust accordingly.”
Governor Wheeler expressed the central bank’s concern about the local currency’s strength against the back ground that the New Zealand dollar has been strengthening versus the U.S dollar since September 2015. Therefore, “a decline in the exchange rate is needed”, Wheeler said, to boost inflation which has been below the RBNZ’s target band for eight straight quarters.
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