The Monetary Policy Committee of the Reserve Bank of New Zealand decided this morning, Wednesday, to reduce interest rates by 50 basis points from 4.25% to 3.75%, marking the third reduction after the bank maintained interest rates at the last meeting following two consecutive reductions of 25 basis points each. Today's reduction is largely in line with market expectations that the Reserve Bank of New Zealand would lower interest rates by the same amount.
This measures the interest rates on overnight borrowing by banks from the Reserve Bank of New Zealand, and this indicator is very important as medium-term interest rates affect the value of the currency. Traders are awaiting the issuance of the Reserve Bank of New Zealand's statement to gauge the likelihood of changing interest rates in the near future.
Typically, the interest rate decision is anticipated in the markets, and thus the interest rate statement issued by the Reserve Bank of New Zealand has the strongest impact on the markets as it contains information about future monetary policy. We will provide you with the Reserve Bank of New Zealand's interest rate statement in just a few minutes.
