Thursday, June 5, 2008

Kiwi dollar falls to three-week low

Reserve Bank governor Alan Bollard today held the official cash rate at 8.25 percent, but indicated the bank will be in a position to lower rates later this year as the economy slows.

The announcement immediately sent the New Zealand down. At 0500 GMT, the kiwi was at $0.7653/63 - a three-week low - compared with $0.7799/01 in late local trade on Wednesday.

So although I'll have to pay more whenever I buy something through the internet, I'll continue to enjoy high interest rates on my long-term bank deposits for a little longer.

In making his expected decision to hold rates at the level they have been at since July last year, Dr Bollard said the RBNZ expected annual inflation to peak at 4.7 percent in the December quarter and to return to the targeted 1 percent to 3 percent range over the medium term.

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