The New Zealand dollar is showing strength against the US dollar, with the current NZD/USD exchange rate at 0.6224.
During its July meeting, the RBNZ opted to maintain the interest rate at 5.5% per annum. In its comments, the central bank confirmed that previous rate hikes had achieved their intended effects, curbing expenses and restraining inflationary pressures.
It is worth noting that consumer spending has declined following a 20-month cycle of interest rate increases, alongside a slowdown in housing construction. Concurrently, housing prices have stabilized to more sustainable levels.
To combat inflation, the RBNZ has implemented a highly aggressive monetary policy phase since October 2021, raising the interest rate by 525 basis points. This represents the most assertive stance in monetary policy since the introduction of the interest rate in 1999.
The central bank is likely to maintain the interest rate at its current restrictive level. Regarding inflation indicators, the RBNZ anticipates a decline from its peak.