New Zealand's central bank to pause in September

The weekend earthquake in the South Island makes it virtually certain that the Reserve Bank of New Zealand (RBNZ) will pause its monetary policy tightening next week. The latest shock comes on top of a string of disappointing economic data and the late August collapse of a large non-bank financial institution. Worries over re-construction costs will stress the bond market for a while but New Zealand has the resources to cover what will be needed, and low government debt. The sovereign debt rating (AA+) looks safe but the Kiwi dollar will probably fall further against the Aussie dollar.