| N.Z. Central Bank May Move to Weaken Own Currency, UBS Says |
| News - Eurasia |
| Written by Candice Zachariahs, Bloomberg |
| Wednesday, 10 June 2009 09:26 |
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June 10 (Bloomberg) -- The Reserve Bank of New Zealand may flag its intention to sell its own currency to stem a record advance that threatens efforts to lift the economy out of the worst recession in at least three decades, UBS AG said.
The New Zealand dollar soared 25 percent since April, the second-best performer against the U.S. dollar after South Africa’s rand. “The Reserve Bank has regarded this kind of surge in the exchange rate as tightening monetary conditions,” Finance Minister Bill English said May 29. Governor Alan Bollard is forecast to keep the nation’s benchmark rate unchanged at a record low 2.5 percent or cut it at tomorrow’s policy meeting. “The markets should keep a look out for language that justifies intervention to cap New Zealand dollar strength,” wrote Ashley Davies, a currency strategist in Singapore at UBS AG, the world’s second-biggest foreign exchange trader. “The RBNZ last intervened in June 2007 and this was flagged at the April 2007 meeting.” |