RBNZ hikes interest rates by 0.50%

Source: Dukascopy Bank SA
On April 13, at 02:00 GMT, the Reserve Bank of New Zealand hiked interest rates. The markets expected a 0.25% hike that would increase rates up to 1.25%. However, the bank hiked 0.50%, which put the Official Cash Rate at 1.50%.

This was the most aggressive rate hike in a period of 22 years. The central bank is beating down on inflation, as it also commented that monetary tightening would continue.

Quoting the statement: "The Monetary Policy Committee today increased the Official Cash Rate (OCR) to 1.50 percent. The Committee agreed it is appropriate to continue to tighten monetary conditions at pace to best maintain price stability and support maximum sustainable employment.

The Reserve Bank's core inflation measures are at or above 3 percent. Inflationary pressure is being further accentuated by current high imported energy and commodity prices, which are lifting headline CPI inflation. The Committee will remain focused on ensuring that current high consumer price inflation does not become embedded into longer-term inflation expectations. "

Released Document

Monetary tightening brought forward

The NZD/USD reacted to the news with an initial 37 point or 0.53% surge. However, afterwards the rate returned to previous levels and even started a broader decline.

On a larger scale, the currency pair has surged through the 2021 October and June high levels at 0.7555 and 0.7617.

Initial Reaction

Larger scale situation

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Wed, 13 Apr 2022 14:14:19 GMT

Bank of Canada hikes rates to 1.00%

On April 13, the Bank of Canada published its monetary policy statement. The central bank hiked its interest rate from 0.50% up to 1.00%, which was an expected 50 base point hike. Moreover, the bank stated that more increases are to be expected, as inflation continues to surge. Meanwhile, the statements of the central bank were seen variously by market participants.

Tue, 12 Apr 2022 12:54:34 GMT

US inflation beats down USD value

On Tuesday, the US Consumer Price Index was released. Monthly inflation in the US was revealed to be at 1.2%. Due to the news, the value of the USD plummeted, as the markets interpreted the news as a signal of incoming US monetary tightening.

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