The Reserve Bank of New Zealand left interest rates unchanged at 1.75% yesterday. Although the central bank felt that the currency needed to fall still further to balance growth, and monetary policy should remain adaptive for a considerable time, officials also said that inflation should grow in the coming months. Now they believe that the consumer price index will return to the goal in the medium term, rather than gradually, and GDP growth in the fourth quarter was weak partly due to time factors. Therefore, their position on the prospects for growth is positive.
RBNZ began to tighten its position in the last few meetings, and therefore I think that the New Zealand dollar should grow. Today there will be data on the trade balance of New Zealand, which can provide support for the currency, as a sharp improvement in the mood of entrepreneurs should lead to increased trading activity.
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