Panic-driven selling pressure contributed to the worst slump since the Kiwi dollar was floated in 1985, and the NZDUSD pair plunged 3 cents over one trading session to breach the key psychological level of 0.7000 USD.
Similar havoc was wreaked in the New Zealand?s equity market, as the benchmark NZSX-50 index dropped to 3957.94, the first close below 4000 since mid-December, with weekly losses adding to 5 percent by Thursday.
Headlines
Prospect of Easing Inflation May Lead to Cuts in Personal Income Taxes
The Government expects inflationary pressures to ease, signaling it may allow personal income tax cuts in next year’s Budget. Finance Minister Michael Cullen said yesterday that in addition to changes to the tax regime, the Government would look at current monetary policy, which was hampering the economy.
http://www.stuff.co.nz/4167381a10.html
Source: Stuff.co.nz
RBNZ Tightens Stance to Close Monitoring of Financial Markets
As the meltdown continued on financial markets, the Reserve Bank today switched from its “business as usual” stance to “monitoring developments in financial markets closely”. Although the statement was unusual, analysts said it was not a signal the central bank is about to soften its tight monetary stance.
http://www.stuff.co.nz/4167120a13.html
Source: Stuff.co.nz
Kiwi Nosedive Sets Off Fear of Rise in Prices of Fuel and Imports
New Zealand’s dollar lost 3c against the US dollar in one day - threatening price rises for petrol and imported goods. It fell from 0.7150 USD at the start of yesterday to a low of US68.23c, but was back up slightly at 0.6902 USD when the New Zealand market closed.
Source: The New Zealand Herald