The Reserve Bank of New Zealand kept the main interest rate unchanged today, but signaled that it may be raised rather soon, boosting the New Zealand dollar.
The RBNZ left the Official Cash Rate (OCR) unchanged at 2.5 percent today. Reserve Bank Governor Alan Bollard said in his statement:
As GDP growth picks up, underlying inflation is expected to rise. A gradual increase in the OCR over the next two years will be required to offset this, such that CPI inflation tracks close to the midpoint of the target band over the latter part of the projection. The pace and timing of increases will be guided by the speed of recovery, but for now the OCR remains on hold.
NZD/USD traded at 0.8222 today as of 9:12 GMT after jumping from 0.8146 to 0.8244.
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