There are 4 criteria that need to be filled before the RBNZ can intervene
Coming on the back of comments from the RBNZ’s Wheeler that intervention can have some short-term impact, Deutsche Bank have just listed the 4 criteria that need to be assessed before intervention is sanctioned:
- Is the exchange rate exceptional on an historical basis:
- Is the exchange rate justified:
- Would intervention be in line with the RBNZ policy target agreement:
- Do market conditions exist to successfully shift the NZD.