The New Zealand dollar fell against the Australian dollar this morning after the NZ Reserve Bank left the official cash rate unchanged at 2.5%.
At 10am one Australian dollar bought $NZ1.297.
“While helping contain inflation, the high value of the New Zealand dollar is detrimental to the tradable sector, undermines GDP growth and inhibits rebalancing in the New Zealand economy,” Reserve Bank governor Alan Bollard said.
“Sustained strength in the New Zealand dollar would reduce the need for future increases in the OCR.
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“Given the medium-term outlook for inflation, it remains prudent to hold the OCR at 2.5%.”
Bollard has kept the cash rate on hold ever since the Christchurch earthquake to help shore up confidence.
See the full NZ Reserve Bank statement here.