NEWS / Foreign Exchange

New Zealand central bank lifts rates

New Zealand central bank lifts rates

New Zealand's central bank raised interest rates for the second straight month on Thursday on concerns of increasing inflation pressures, but most analysts were convinced that a further tightening was unlikely.

The Reserve Bank of New Zealand (RBNZ) lifted its official cash rate (OCR) by 25 basis points to 7.75 %, the highest in the industrialised world, but unlike previous statements did not say whether another lift might be necessary.

RBNZ Governor Alan Bollard said there were signs of acceleration in underlying inflation and the latest rise in interest rates was aimed at ensuring inflation remains within the central bank's target band.

In the accompanying statement, Bollard warned the New Zealand dollar was at exceptionally and unjustifiably high levels.

The rate announcement made kiwi dollar rise to USD 0.7490 but Bollards warning about the high New Zealand dollar turned the market and it was sold off to USD 0.7419 as lowest level.

NZD/USD traded between 0.7419 and 0.7490.

Asian stocks up, Seoul hits record

Asian stocks rose on Thursday, with Seoul shares scaling a fresh peak, following a rally on Wall Street that pushed the blue-chip Dow above 13,000 for the first time.

A steady stream of strong profit reports from firms such as Amazon.com Inc. and surprisingly strong U.S. durable goods data had helped boost the U.S. market and lifted confidence in Asia's top export market.

At 0020 GMT, Tokyo's Nikkei average had climbed 0.80 % as industrial robot maker Fanuc rose 1.73 % and Sony climbed 0.94 %.

South Korea's benchmark KOSPI put on 0.83 % after touching an all-time high of 1,565.03, as market heavyweight Samsung Electronics gained 2.3 % and steel maker POSCO added 3.14 %.