(Adds market reaction)
WELLINGTON, March 2 The Reserve Bank of New
Zealand (RBNZ) said on Thursday risks around future interest
rate movements were equally weighted, but warned of uncertainty
stemming from U.S. President Donald Trump's protectionism.
The New Zealand dollar jumped to $0.7166 from
$0.7144 before the speech.
"The greatest source of uncertainty relates to the U.S.
Administration policies in respect to its 'America first' policy
platform," Governor Graeme Wheeler said in a speech, the text of
which was posted on the bank's website.
The bank highlighted after its last monetary policy
statement in February that its focus had shifted from the
domestic economy to international events.
Wheeler pointed out in his speech to Craigs Investment
Partners’ Investor Day in Auckland that small open economies
such as New Zealand's were hit hard by international shocks.
"The Bank assesses whether these, or a combination of them,
warrants a change in monetary policy," Wheeler said.
"The balance of risk in the global economy is on the
downside," he said.
On the domestic front, Wheeler singled out the housing
market as the greatest risk, though prices had moderated in
The RBNZ last month held the official cash rate steady at
record lows of 1.75 percent and flagged it could remain there
for two years or more.
(Reporting by Charlotte Greenfield and Tom Westbrook; Editing
by Mark Potter)