New Zealand surprises with rate hold
The Reserve Bank of New Zealand unexpectedly held its policy rate at 2.75% on October 28, against expectations for an increase to 3%.
The Monetary Policy Committee voted four to three, with the minority favouring a 25-basis-point hike. Annual inflation eased from 4.1% to 3.7% in the September quarter, while the bank expects it to reach 4.4% in December.
The New Zealand dollar fell as much as 1.7% against the US dollar to around 0.5583 following the surprise decision. All committee members agreed that tighter monetary policy may still be required. The pause therefore does not necessarily signal the end of the tightening cycle.
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