RBNZ $200m December trade trivial
(01 February 2013 – New Zealand) Traders have criticised the Reserve Bank of New Zealand (RBNZ) for its sale of almost NZ$200 million (A$160 million) of kiwi dollars in December, which they say was probably an opportunistic sale rather than an attempt to influence the high exchange rate.
Statistics released on Wednesday show the central bank has sold roughly a quarter of a billion dollars of its local currency holdings over the last three months.
The Reserve Bank is not allowed to actively intervene in the currency unless it reaches 'extreme' levels, and the timing has to be opportune.
Westpac market strategist Imre Speizer said the sale represented the management of foreign exchange reserves.
'Some may characterise it as a passive form of intervention. If so, it would be indeed extremely passive', he said.
'It would not be opportune to intervene in the kiwi here, because much of it's caused by US dollar weakness and global central bank money printing,' Speizer said.
Historical data shows the Reserve Bank periodically makes major purchases or sales of currency.
The largest sell-off was almost NZ$1.5 billion of kiwi dollars in July 2007.
The Reserve Bank is not allowed to actively intervene in the currency unless it reaches 'extreme' levels, and the timing has to be opportune.
Westpac market strategist Imre Speizer said the sale represented the management of foreign exchange reserves.
'Some may characterise it as a passive form of intervention. If so, it would be indeed extremely passive', he said.
'It would not be opportune to intervene in the kiwi here, because much of it's caused by US dollar weakness and global central bank money printing,' Speizer said.
Historical data shows the Reserve Bank periodically makes major purchases or sales of currency.
The largest sell-off was almost NZ$1.5 billion of kiwi dollars in July 2007.
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