The RBNZ has sold NZ$¼ billion in the currency markets recently. Is this an attempt to push the NZ$ down?

The RBNZ has sold NZ$¼ billion in the currency markets recently

Has the Reserve Bank of New Zealand intervened to try and drive the NZ dollar down?

In data released today, the RBNZ balance sheet shows it spent at least NZ$199 million selling the NZ$ in December, on top of at least NZ$64 million in late November.

We have asked the RBNZ whether these transactions represent part of a programme to modify the rising pressure on the currency. A spokesperson said "We do not comment on these statistics."

The last time they acknowledged doing this was in June/July/August 2007 when they spend at least NZ$2.3 billion trying to suppress the currency. At that time the TWI had risen to 76.88 on July 24, 2007. It fell to 67.9 by the end of August 2007.

The RBNZ was back in the market as a net seller of the NZ$ in the period February to May 2008 selling another NZ$1.5 billion. Over this period the TWI reached a high of 74.2, and ended that period at 69.7.

The TWI ended today at 75.42 and reached a recent high of 75.71 on January 11, 2013. The all time high was 76.88 on July 24, 2007.

Today's data release suggests some minor level of intervention, although it has had no material impact in lowering the currency.

It is quite possible given the low values involved that other central bank activities could have generated the data, such as funding New Zealand's commitments to international organisations.

The next time this data is released will be Wednesday, February 27.



To subscribe to our daily Currency Rate Sheet email, enter your email address here.




We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

We welcome your comments below. If you are not already registered, please register to comment or click on the "Register" link below a comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current Comment policy is here.


Good news if they have intervened. I had wondered that the TWI seems to have hit a peak, even though Japan has announced plans to print trillions, and GB, the US and Europe also still have very active virtual printing presses, which otherwse might have seen the NZD continue northwards. I wonder if Mr Wheeler hopefully has decided that keeping the exchange rate stable, or at least no higher, is essential for trading industries to not all gradually go to the wall. He may just be slowing the water torture (which would be a shame, against actually setting a ceiling), but if he is determined to hold the line, then very good.
By all means then keep the OCR where it is; and not have the exchange rate perform inflation resistance through killing off the industries we actually need to support.

I'd say it was Wheedler flying in the face of popular opinion,... if Johnny the Finger counts as popular......
or was that peeing into the wind...always getting those two mixed up.

Why is Wheeler doing this?
He and BE and JK keep telling us it will not work.
Maybe they have had a collective brain seizure.
On the other hand they know it had an effect twice before if only temporary.

I hope it was not the Euro, Pound ,  US$ or YEN

If only we could get paid in oil what a lark that could be.  We print paper and they give us fuel for a free ride!

Just to put it all in perspective, English was borrowing more than this every week for how many months. It would have been easier to print the stuff back then and save us the bother.