TOKYO: The New Zealand dollar weakened against the other major currencies in the Asian session on Monday, as some economist bet that the Reserve Bank of New Zealand may cut its key interest rate in the upcoming monetary policy meetings.
ANZ Bank New Zealand Ltd. and First NZ Capital Ltd. has joined five other banks in forecasting that RBNZ is likely to cut its Official Cash Rate at the upcoming meetings scheduled for both June and July. Some forecast about 50 basis points of cuts over the coming months from 3.5%.
The next RBNZ monetary policy meeting is due on June 11.
Meanwhile, the Reserve Bank signaled at the April meeting that interest rate hikes were off the table. Also, it will observe conditions that could prompt a rate cut.
China, which is New Zealand’s largest trading partner, announced additional easing on Sunday. The People’s Bank of China (PBoC) said it would cut the benchmark one-year lending rate by 0.25 percentage points to 2.25%, effective Monday following Saturday’s soft trade and inflation numbers for April. The soft data signaled the China may struggle to meet its official growth target of about 7%.
