ABN Amro and Morgan Stanley are out with notes suggesting the Reserve Bank of New Zealand may have intervened to sell NZD in March:
more to come
"They have no choice but to resort to intervention to weaken the exchange rate," Roy Teo, a strategist at ABN Amro in Singapore, said by telephone on Tuesday. "If they were to cut interest rates, then it runs the risk of a hotter domestic economy and housing market."
"We suspect the RBNZ came in to weaken the currency when the kiwi was above 76 cents last week," Teo said. "Perhaps they are waiting for more extreme levels before they intervene more aggressively."
Morgan Stanley analyst Geoffrey Kendrick,:
"Given in the past they've intervened when kiwi's been strong, the probability is increasing," Kendrick said by phone on Tuesday.
Note,
Not all analysts see Wheeler intervening. One of the RBNZ's criteria for such a move is that market conditions must be opportune and allow it to work, said Sam Tuck, a senior currency strategist at ANZ Bank New Zealand Ltd. in Auckland.
"I don't think, at the moment, the currency passes that muster," he said. Factors outside of the country -- including global monetary easing -- may keep the currency elevated, Tuck said.
via Bloomberg
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