Kiwi Weakens on RBNZ’s Accommodative Outlook

2026-02-18 01:40 By Kyrie Dichosa 1 min. read

The New Zealand dollar weakened to around $0.601 after the Reserve Bank held key interest rates and signaled that policy would remain accommodative.

The central bank indicated that monetary policy is likely to stay supportive in the near term, with adjustments coming gradually as the recovery strengthens and inflation moves sustainably toward the target midpoint.

However, current forecasts suggest the possibility of a quarter-point hike later this year if conditions warrant, revised from previous guidance that had pointed to mid-2027 for a potential rate increase.

Still, officials remain cautious about the timing of any stimulus withdrawal.

Traders pared expectations for RBNZ rate hikes, with markets pricing in roughly about 75% of a hike by October shortly after the decision, down from 90% prior.

Nevertheless, some economists anticipate tightening as early as September.

Markets are now focused on Governor Anna Breman’s press conference later today for further policy guidance.



News Stream
Kiwi Dollar Drops Amid Middle East Uncertainty
The New Zealand dollar fell to $0.570, hitting its lowest level since November 2025, as expectations for a swift resolution to the Middle East conflict waned. US President Donald Trump, in a prime-time address on Thursday, offered little clarity on the path to ending the war he claimed would conclude soon, while warning that US forces could continue operations in Iran for the next two to three weeks. The Reserve Bank of New Zealand recently warned that rising oil prices, driven by the conflict, could push inflation higher and weigh on household spending. Governor Anna Breman noted that the central bank would look through short-term inflationary impacts but signaled that persistent energy-driven inflation could prompt future rate hikes. The central bank is expected to stand pat at its meeting next week, with the probability of a May rate hike falling sharply to 25% from 60% last week. The kiwi has fallen 0.6% so far this week and is on track for its second consecutive weekly decline.
2026-04-02
New Zealand Dollar Extends Gains
The New Zealand dollar rose to $0.576, extending its rebound from a four-month low as sentiment improved after the US indicated that the Middle East could end soon. President Trump said the US military operations in Iran could conclude within two or three weeks, with or without an agreement, adding that Washington has achieved its objectives. The conflict has upended global markets, raising fears of a spike in inflation and a slowdown in economic activity. The RBNZ recently warned that surging oil prices driven by the conflict risks pushing inflation higher and eroding household spending. Governor Anna Breman said that the RBNZ will look through temporary, energy-driven inflation spikes but signaled that interest rates could rise if price pressures begin to threaten longer-term inflation expectations. The RBNZ is widely expected to hold rates steady next week, while the probability of a rate hike in May has fallen to 25% from 60% at the end of last week.
2026-04-01
New Zealand Dollar Hovers Near 4-Month Low
The New Zealand dollar slipped to $0.573, hovering near a four-month low as concerns about a prolonged energy shock from the Middle East conflict continued to weigh on the economic outlook. The Reserve Bank of New Zealand has warned that the country is vulnerable to surging oil prices, which are expected to push inflation higher while eroding household spending power. Governor Anna Breman said that the RBNZ will look through temporary, energy-driven spikes in inflation but signaled that interest rates could rise if price pressures begin to threaten longer-term inflation expectations. The RBNZ is expected to hold rates steady next week, while the probability of a rate hike in May fell to 25% from 60% at the end of last week. On the data front, New Zealand’s business sentiment for March dropped to its weakest level since mid-2024, when the country was in recession, as the war dampened confidence in future earnings and investment. The kiwi dollar fell 4.1% in March amid the uncertainty.
2026-03-31