Earlier in the Asia-Pacific trading hours on Monday, the 16th of March 2020, the Reserve Bank of New Zealand (New Zealand’s Central Bank) had axed its benchmark interest rate by 75 basis percentage point to 0.25 per cent, which eventually had drowned the Kiwi currency to $0.5956 against its American counterpart, a level never witnessed since the ages of great financial depression on May 11th, 2009.
In point of fact, latest move of the Reserve Bank of New Zealand came forth a day after the Australian Central Bank had axed its benchmark interest rate by 50 bps and the RBNZ move followed an unprecedented US Fed rate-cut of 50bps to a target range between 0.0% to 0.25 per cent as the global economic majors alongside Kiwis had been bracing for a “substantial” scale of impact on its economy due to the coronavirus outbreak.
Meanwhile, addressing to a growing demand of further monetary measures and stimulus amid a global-scale health emergency, RBNZ said in a statement following the rate-cut earlier on Monday (March 16th), “The negative economic implications of the COVID-19 virus continue to rise, warranting further monetary stimulus.
Demand for New Zealand’s goods and services will be constrained, as will domestic production. Spending and investment will be subdued for an extended period while the responses to the COVID-19 virus evolve. ”