New Zealand's no-nonsense approach to monetary policy

New Zealand's central bank says the level of its currency is 'unjustified and unsustainable' in light of declining commodity prices, which hints at further action on rates down the track.

The Reserve Bank of New Zealand tightened monetary policy yet again at its July meeting but is set to put its policy lever on hold for a few months as it assesses the economy’s response to tighter policy. With activity remaining strong and the outlook bright, it surely won’t be long before it raises rates again.

The cash rate in New Zealand will rise by 25 basis points to 3.5 per cent following the RBNZ’s decision to tighten monetary policy. Rates have been tightened by 100 basis points since the RBNZ began raising rates in March. 

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