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UPDATE 1-RBNZ governor says U.S. protectionism greatest source of uncertainty
March 1, 2017 / 8:31 PM / 7 months ago

UPDATE 1-RBNZ governor says U.S. protectionism greatest source of uncertainty

(Adds market reaction)

WELLINGTON, March 2 (Reuters) - 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 recent months.

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)

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