The New Zealand dollar fell in Asian trade on Wednesday against a basket of major rivals, sharpening its decline for the fourth straight session against the US dollar and hitting a five-year low following the RBNZ’s policy meeting.
The Reserve Bank of New Zealand cut interest rates for the fifth straight session and warned from the risks of the US tariffs, asserting its commitment to accommodative policies.
The Price
The NZD/USD price fell 0.9% today to $0.5485, the lowest since March 2020, with a session-high at $0.5561.
The pair closed down 0.15% on Tuesday, marking the third loss in a row on risk aversion as the global trade tensions spiked.
RBNZ
The Reserve Bank of New Zealand cut interest rates by 25 basis points today to 3.5%, the lowest since October 2022, and the fifth such cut in a row, matching analysts’ expectations.
It’s the first global central bank to review its monetary policies since the US imposed blanket tariffs on imports last week, tanking the global markets.
The RBNZ said the cut is consistent with its commitment to maintain a stable and low inflation rate.
It also warned that recent US tariffs weaken the global economic outlook and pose risks to New Zealand’s growth and inflation.
New Zealand Rates
Following the meeting, the odds of a 0.25% rate cut by the RBNZ in May surged to 95%, with the futures market expecting New Zealand rates at 2.75% by the end of the year.
