NZD/USD: Downside risks over the short-term and into 2024 – MUFG

The Reserve Bank of New Zealand (RBNZ) kept the Official Cash Rate (OCR) unchanged at 5.50%. Economists at MUFG Bank analyze NZD outlook after the Interest Rate Decision.

RBNZ leaves key policy rate unchanged

The RBNZ announced an unchanged monetary policy stance with the OCR left at 5.50%.

We still believe the RBNZ has completed its tightening cycle and the data flow underlines the weakening economy that should allow the RBNZ to remain on the sidelines. 

Weaker China growth, weak growth in New Zealand and global growth risks in general will keep the performance of NZD toward the bottom of the G10 performance table going forward and we see downside risks for NZD versus the Dollar over the short-term and into 2024.