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New Zealand - Rates will reach a floor of 1.75% in New Zealand

We don’t believe that the slightly more positive tone of the policy statement released after the Reserve Bank of New Zealand left interest rates on hold at 2.25% today will prevent the Bank from cutting rates to 2.0% at the meeting in June. What’s more, we think that the RBNZ will have to go one step further and reduce rates to 1.75% later this year, especially if the New Zealand dollar stay strong.

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