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The RBNZ keeps the cash rate unchanged as expected.

Written by Sam Coxhead on June 14th, 2012.      0 comments

9:30 AM (NZT) As expected the RBNZ just left the cash rate unchanged at 2.50%. In its accompanying monetary policy statement it has indicated a lower growth outlook driven by the increasing downward growth pressures on global growth rate driven out of lower European consumption. The RBNZ certainly have taken the prudent view that they can either cut or raise the cash rate if needed and the direction will be closely aligned with international developments. In terms of the domestic economy, they still see the Christchurch rebuild as a significant growth boost in the coming couple of years. They view the current 2.50% as already stimulatory.
The press release can be viewed here .
In offshore markets overnight the nervousness continues ahead of the Greek elections price action remains directionless as the pushing and pulling continues in the market. The outlook in Europe remains very grim from any perspective. A German led integrated banking plan would be a first step towards wider financial integration passing wider European control to Germany. In the short term the Greek election poses a major event risk. The run on the banks for Euro’s has continued and there will be major capital controls put in place should the election produce leadership that steers Greece from the Euro-zone. Countering the risk aversion is the prospect of further central bank stimulation should this worst case scenario play out. The FED, ECB, BOE and BOJ all seem poised to act if required.
          Past 24 hours
  Current level Pre-RBNZ  % Chge since RBNZ   Low High
NZD/USD 0.7748 0.7738 0.13%   0.7719 0.7809
AUD/USD 0.9941 0.9933 0.08%   0.9926 1.0003
NZD/AUD 0.7795 0.7790 0.06%   0.7772 0.7817
AUD/NZD 1.2829 1.2837 -0.06%   1.2793 1.2867
NZD/GBP 0.4997 0.4990 0.14%   0.4980 0.5012
NZD/EUR 0.6168 0.6161 0.11%   0.6148 0.6226
NZD/YEN 61.55 61.50 0.08%   61.31 62.15
NZD/CAD 0.7977 0.7970 0.09%   0.7948 0.8007
Topics: RBNZ