Free Trial

Fitch Affirms Ratings

NEW ZEALAND

Fitch Ratings affirmed New Zealand's long-term foreign-currency issuer default rating at 'AA' with a positive outlook. Fitch has also affirmed the local currency rating at 'AA+' with a stable outlook.

  • In its report Fitch says New Zealand's ratings are underpinned by very high governance standards and a demonstrated commitment to prudent fiscal management, balanced against high levels of household and net external debt.
  • Another positive is the economy's resilience to shocks, as evident during the coronavirus pandemic New Zealand's effective suppression of the virus and macro-policy response has facilitated a V-shaped recovery, with GDP having returned to pre-pandemic levels by 3Q20.
  • Fitch expects monetary policy to remain accommodative with the RBNZ keeping the policy rate at 0.25% through 2022, given below target inflation and labour market slack. Fitch do not foresee the RBNZ moving to a negative policy rate with the strong economic recovery, although this remains a possibility in the event downside risks materialise. Purchases of government bonds under the RBNZ's large-scale asset purchases (LSAP) programme are set to continue, although the pace of purchases is likely to moderate because of improving economic conditions and reduced bond issuance.

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.