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NZD: Is The RBNZ Close To Intervention?

Published 04/21/2015, 01:44 PM
Updated 07/09/2023, 06:31 AM

The market should be nervously watching the RBNZ for any hints it may intervene against the overvalued NZD, as house price inflation poses a high bar to an OCR cut, says Deutsche Bank (NYSE:DB).

"One reason the RBNZ may be closer to intervening than the market assumes is that its official TWI overstates the kiwi dollar’s depreciation over the past year by omitting third-country effects," DB argues.

"It must therefore take its own TWI with a large pinch of salt. Benchmarking against alternative TWIs should lead the RBNZ to discount the fall in the TWI over the past year, giving it even greater reason to intervene against the strong NZD," DB adds.

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