They don’t call it a “currency war” for nothing.
Moments ago, the RBNZ cut rates by 25 bps to 2.25% in the latest shot across the bow in what is now a years-long race to the bottom.
Here are the bullets:
- NEW ZEALAND CUTS KEY INTEREST RATE TO 2.25% FROM 2.50%
- RBNZ SAYS FURTHER EXCHANGE RATE DEPRECIATION IS APPROPRIATE
- RBNZ SEES INFLATION REACHING 2% IN 1Q 2018 VS 4Q 2017
- RBNZ SEES 4Q 2016 ANNUAL INFLATION AT 1.1% VS 1.6%
Cue the kiwi plunge:
RBNZ governor Graeme Wheeler apparently made up his mind last week:
- WHEELER: DECIDED TO CUT RATES LAST FRIDAY
But someone forgot to tell the PhD’s because 15 out of 17 economists surveyed by Bloomberg expected New Zealand to stand pat.
We don’t blame them. After all, who could have foreseen competitive easing in this environment?
via Zero Hedge http://ift.tt/1QHIprK Tyler Durden