RBNZ Orr:  rate cut reduces probability of having to do more later, Kiwi rallies 0.30%

RBNZ Orr has said that while the central bank will do whatever it takes to support NZ economy, the rate cut reduces probably of having to do more later.

Key comments:

• We can afford to wait, watch and observe what’s happening.
• Inflation expectations is an important signal to watch.
• Rate cut reduces probability of having to do more later.
• Rate reduces probably of having to do more later.
• Negative can be an impactful tool broadly across the economy. 

The RBNZ assistant governor said if monetary policy is to be successful for a further 30 years we need to confront challenges of stubbornly low inflation, interest rates. He also has said the same comments as Orr today,  yesterday. 

FX implications: 

This is what the markets have been waiting for - some form of confirmation that the RBNZ is done for now which gives the green light for a correction. NZD is up 0.30% on the comments