Dollar dips after OCR announcement
Kiwi falls against the against the greenback as interest rates are held
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The New Zealand dollar has fallen from its post-float high against the US dollar this morning after the Reserve Bank left the official cash rate (OCR) unchanged at 2.5%.
The Kiwi reached a new high of US 87.65c last night according to Thompson Reuters data, continuing gains made this week as the US debt impasse has fuelled demand for growth-linked currencies such as the Kiwi.
But it has fallen to US 87.21c following Reserve Bank Governor Alan Bollard’s announcement on interest rates.
This morning, Mr Bollard signalled the next OCR review, due mid-September, would almost certainly see a rise in the OCR as the economy performs more strongly than economists have expected.
"The current very high value of the New Zealand dollar is acting as drag on the New Zealand economy. If this persists, it is likely to reduce the need for further OCR increases in the short term,” he said.
NBR staff
Thu, 28 Jul 2011
Thu, 28 Jul 2011
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Dollar dips after OCR announcement
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