2025.08.2002:39:32UTC+00New Zealand Dollar Tumbles as RBNZ Cuts Rates

The New Zealand dollar experienced a decline of over 1% on Wednesday, settling at $0.582, marking its lowest point since mid-April. This drop followed the Reserve Bank of New Zealand's decision to cut interest rates and signal the potential for additional easing measures. Aligning with market predictions, the central bank reduced the official cash rate by 25 basis points to a three-year low of 3%. This move was aimed at stimulating a sluggish economy and providing a buffer against external challenges. Earlier in the month, a new 15% tariff imposed by the US on New Zealand goods came into effect, increasing the strain on the nation's export-centric economy. Since August 2024, the RBNZ has slashed rates by a total of 250 basis points to support a delicate economic recovery, with inflation staying within the 1–3% target range, thereby offering policymakers the flexibility to continue easing monetary policy. Additionally, the New Zealand dollar faced downward pressure from a strengthening US dollar, as traders looked forward to Federal Reserve Chair Jerome Powell’s forthcoming address at the Jackson Hole Economic Policy Symposium for further insights into the US interest rate outlook.