New Zealand Leaves Key Rate Unchanged at Record 8.25%
If you want a guess at what rates should be to stop the dollar fall or you want a currency that is likely to hold it's value take a look at a real central banker:
Jan. 24 (Bloomberg) -- New Zealand's central bank left the benchmark interest rate at a record-high 8.25 percent to combat accelerating inflation, saying the prospects of slowing global growth haven't curbed the domestic economy.
``The New Zealand economy is projected to keep growing reasonably well,'' Reserve Bank Governor Alan Bollard said in a statement released in Wellington today. ``The labor market remains tight, domestic income growth is still strong and core inflationary pressures persist.''
The longest economic expansion in 60 years has soaked up labor, fanning wages and pushing inflation above the central bank's target, giving Bollard little scope to cut borrowing costs anytime soon. A U.S. economic slowdown that prompted Federal Reserve policy markers to cut rates at an unscheduled meeting this week may spread to New Zealand later this year, allowing Bollard to cut borrowing costs
``Interest rates are set to stay at the current high levels for some time,'' said Khoon Goh, senior economist at ANZ National Bank Ltd. in Wellington. ``We expect an easing toward the end of the year. The global slowdown will eventually have a large impact on New Zealand.''
New Zealand's dollar rose to 76.74 U.S. cents at 10:10 a.m. in Wellington trading from 75.96 cents immediately before the statement.
Guess how much real estate is going to fall if rates go to 8.25%