Following the August monetary policy meeting, the Reserve Bank of New Zealand (RBNZ) board members decided to leave the official cash rate (OCR) unchanged at 5.50%.

The RBNZ policy decision aligned with the market expectations of a no-rate change this month.

Market reaction

In an immediate reaction to the RBNZ announcement, NZD/USD jumped over 20 pips to recapture the 0.5950 level. The pair is still down 0.22% on the day at 0.5955, as of writing.

NZD/USD: 15-minutes chart

Why the RBNZ decision matters to traders?

The Reserve Bank of New Zealand (RBNZ) holds monetary policy meetings seven times a year, announcing their decision on interest rates and the economic assessments that influenced their decision. The central bank offers clues on the economic outlook and future policy path, which are of high relevance for the NZD valuation. Positive economic developments and an upbeat outlook could lead the RBNZ to tighten the policy by hiking interest rates, which tends to be NZD bullish.