Latest news with #RBNZ
Bloomberg
2 days ago
- Business
- Bloomberg
RBNZ Needs More Time to Decide on Path for Cash Rate, Silk Says
The Reserve Bank of New Zealand needs more time to assess the impact of global trade turmoil on the local economy before deciding on the appropriate path for the Official Cash Rate, Assistant Governor Karen Silk said. 'Absolutely we do,' Silk said in an interview with Bloomberg Friday in Wellington. The RBNZ's central projection for the OCR 'has got significant uncertainty around it' and 'that fog is quite thick,' she said.
Reuters
2 days ago
- Business
- Reuters
New Zealand's interest rates in neutral zone, data to decide next move, central bank official says
SYDNEY, May 30 (Reuters) - New Zealand's interest rates are in the 2.5%-3.5% neutral band, with past policy easing yet to flow through to the economy to make future moves more dependent on how the economy evolves, a senior central banker said on Friday. In an interview with Reuters, Reserve Bank of New Zealand Assistant Governor Karen Silk highlighted the enormous global trade uncertainties, but the central projection is for the economy to recover on the back of past easing, offsetting some trade risks. The RBNZ cut interest rates by 25 basis points to 3.25% on Wednesday but signaled it might be nearing the end of the easing cycle, having cut rates by a whopping 225 bps since August. When asked about why there is no need to go below the neutral rate, Silk said rate cuts would take time to flow through and the strong commodity prices are pointing to a buoyant export sector. "The track for (OCR) also indicates that whatever we do is going to be data-dependent, and then we will be looking to the data to help us to decide when or if we cut further from here." Silk said global central bankers cannot simply react to the first thing they see when asked about the latest court rulings on U.S. President Donald Trump's tariffs. "There isn't certainty to where these things land. But what we do know is that we do have heightened uncertainties." A global front-runner in withdrawing pandemic-era stimulus, the RBNZ lifted rates 525 basis points between October 2021 and September 2023 to curb inflation in the most aggressive tightening since 1999. The punishing borrowing costs took a heavy toll on demand and tipped the economy into recession last year. While the economy has emerged from the slump, growth remains weak and is being further hampered by a slowdown in the global economy and the government's tight fiscal policy.
RNZ News
2 days ago
- Business
- RNZ News
When will we see King Charles on our currency?
Samples of the 10 cent coin with the new 'heads' image of King Charles III are quality checked before production. Photo: Supplied/RBNZ It will be several years before currency bearing the image of King Charles III comes into circulation. The new 10 cent coin featuring King Charles will be released in 2027, with the rest of the coins to follow around 2029. Reserve Bank director of money and cash Ian Woolford told Morning Report the wait was partly due to the King's antipathy to waste. Buckingham Palace made it "fairly clear to us that the King didn't want to see waste", he said. "We need to hold a decent inventory to met the currency needs of the public, so we hold quite a lot of ten cent coins with the Queen's face on it," Woolford said. "Rather than destroy those coins, they'll continue to be issued and continue to circulate, and when we do issue the King's coins we won't destroy the Queen's coins, they'll circulate side by side." He said the other reason is the complex process, which included liaising with the palace, testing and getting production scheduled at a mint. "There's actually more science than art to things like bank notes and coins." Woolford said, contrary to popular belief, there's more cash in circulation than ever. "It's a bit of a myth that no one uses cash anymore." he said. "There's more cash in circulation than there's ever been, it's sort of doubled over the past ten years." While there's less cash used as a proportion of all transactions, surveys and StatsNZ data, showed "a bit of a turn around - the high users of cash are using it more and more". New Zealand's coins of King Charles would use an image the Royal Mint created for Commonwealth countries. New Zealand could have chosen to have our own image created, but it would have required sign off from Buckingham Palace regardless, Woolford said. The coins, which will be minted in Canada, would have the same physical characteristics as those featuring Queen Elizabeth II, but he will face to the left, as convention dictates new sovereigns face the opposite way than their predecessors. Queen Elizabeth II has appeared on the "heads" side of New Zealand coins since 1953, but did not appear on banknotes until 1967, when the Reserve Bank printed its third series of banknotes, this time decimal currency. Sign up for Ngā Pitopito Kōrero , a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
1News
3 days ago
- Business
- 1News
Ten cent coin with King Charles III image approved for production
A ten cent coin with the image of King Charles III has been approved for production, the Reserve Bank of New Zealand (RBNZ) has confirmed. Photos of the quality checking were released today, giving people the first look at the actual coin. RBNZ director of money and cash Ian Woolford said New Zealanders could expect to see it in their change around 2027. "We received pre-production samples of the coin to check and approve before starting the full production run. We check the coins for quality, weight, size, security properties and that they match the design we ordered," he said. The coin is stamped with the year 2024 - which is when RBNZ placed the order with the Royal Canadian Mint. New Zealand does not have a mint, therefore coins are produced overseas. ADVERTISEMENT These photos are production samples of the new coins that will be in circulation around 2027. (Source: RBNZ) The King's effigy was designed for the Royal Mint by illustrator and designer Dan Thorne to be used on all New Zealand's coins. The Royal Numismatic Society of New Zealand provided advice on the 10 cent coin before it went into production. The King faces to the left in keeping with the convention that the direction changes between sovereigns. "The reverse [or tails] side of the 10 cent coin still features an image of a koruru - the carved face on the gable of a meeting house - designed by James Berry as a part of the 1967 decimal coin series," Woolford said. 'All existing circulating coins, and $20 banknotes, bearing images of Queen Elizabeth II continue to be legal tender. We order notes and coins infrequently and do not plan to destroy stock or withdraw them early from circulation as this would be wasteful and poor environmental practice.' Minting the 20 cent, 50 cent, $1 and $2 coins with the KCIII image is likely to be around 2027. Coins then typically enter circulation around two years after production. "Updating our currency with the new sovereign takes several years because we always hold sufficient stock to deal with demand spikes or supply issues. We make enough coins and banknotes just in case - not just in time," said Woolford. "We will let everyone know when the KCIII coins are due to enter circulation as the time nears." Banks, retailers, consumers and anyone using or handling cash will not need to do anything differently when we introduce the coins bearing the image of the King. We will work with the cash industry to make sure there are no glitches with cash handling machines like self-service checkouts, vending and change machines accepting and issuing the new and old coins.
RNZ News
3 days ago
- Business
- RNZ News
How the Reserve Bank decides the OCR
Photo: RNZ Analysis - The setting of the Reserve Bank's monetary policy committee meetings to set the official cash rate (OCR) every six weeks or so is the closest New Zealand has to a Papal Conclave, but without the brightly coloured clothing and smoke out the chimney. The Committee was set up in 2018, replacing the Governor as the sole official decision maker on interest rates, with four RBNZ officials being joined by three external members. The change was explained as New Zealand finally adopting "best practice" of other central banks around the world, where a diverse range of the suitably qualified members are expected to bring different perspectives making for better decisions. Contrary to the practice of many of the big central banks, which vote on what to do with interest rates, the RBNZ prefers to arrive at a consensus, implying some form of collegial unanimity. But just twice the consensus and conformity have been tested by the extent of differences to force a vote. The first was in May 2023, when the MPC voted 5-2 to raise the OCR by 25 basis points 5.5 percent rather than stay on hold at 5.25 percent. That increase proved to be the peak of the RBNZ's tightening cycle. The second was the RBNZ's latest decision , with one member voting for keeping rates on hold and the other five opting for a 25 basis point cut to 5.25 percent. Like the cardinals in the Vatican, who voted for whom remains a secret. At many other central banks it's quite clear who voted for what option and why. Governor Christian Hawkesby explained the vote in both cases has come at a time when the RBNZ is at a "point of inflection", and so a more broad range of opinions and options was being debated. In 2023 the RBNZ was near the end of its rate rises and in 2025 it is near the bottom. Which highlights another issue about the monetary policy committee -- publicly it has remained in the shadow of the RBNZ Governor. The external members are known, they often sit in the front row of monetary policy news conferences -- mute. It is the governor and a couple of senior officials who do the talking at the conference, and who do the press interviews in following days as they sell the latest decision. At various overseas central banks the external members do speak publicly, within guidelines, and express their opinions, even if they are dissenting. But in another RBNZ surprise, an external member of the committee, Prasanna Gai, a professor of macroeconomics at the University of Auckland, will speak at an Auckland Chamber of Commerce event on monetary policy and trade uncertainty on June 12. However, any excitement of such a first is tempered by the advice there will be no speech notes, the event is not being streamed, and no interviews.
