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New Zealand dollar firmer after RBNZ holds rates

New Zealand’s currency was holding onto gains against the greenback in the morning session after the country’s central bank left interest rates unchanged.

The New Zealand dollar was 0.2 per cent stronger against its US counterpart at $0.7244, after firming as much as 0.7 per cent in early trade.

That bump followed the Reserve Bank of New Zealand’s decision to leave interest rates at a record low 1.75 per cent earlier in the morning, as expected by economists.

Graeme Wheeler, the central bank’s governor, said on Thursday:

GDP growth in the March quarter was lower than expected, with weaker export volumes and residential construction partially offset by stronger consumption. Nevertheless, the growth outlook remains positive, supported by accommodative monetary policy, strong population growth, and high terms of trade.

Mr Wheeler noted that wage and non-tradables inflation remained moderate but were expected to increase gradually, bringing headline inflation to the midpoint of the bank’s target band in the medium term, while longer-term inflation expectations “remain well-anchored at around 2 per cent”.

The kiwi dollar is up 4.4 per cent during the year to date.