“Rapid on-going decreases in interest rates would likely result in an unsustainable surge in growth, capacity bottlenecks, and further inflame an already seriously overheating property market. It would use up much of the Bank’s capacity to respond to the likely boom/bust situation that would follow, and place the Reserve Bank in a situation similar to many other central banks of having limited room to respond to future economic or financial shocks”.
Clearly the RBNZ wants to keep its ammunition dry for another day. But they can’t have it both ways: high interest rates = a high Kiwi dollar.
Yesterday’s trade recommendation: https://www.tradingfloor.com/posts/nzdusd-kiwis-recovery-potential-remains-8007143