WELLINGTON, March 14 (Reuters) - Reserve Bank of New Zealand Governor Graeme Wheeler on Thursday said he supported the sell-off in the New Zealand dollar after the central bank said it expected to keep interest rates chained at a record low 2.5 percent through the end of the year.
“The exchange rate has come off around 70 (pips) against the U.S. dollar which we regard as a good thing, and that’s because the market was basically looking for a more hawkish statement and that was their position,” Wheeler told a parliamentary committee.
He added that the currency could still depreciate at some stage, and that such a fall could be sharp.
The New Zealand dollar sank to $0.8162 earlier in the day, hitting its lowest level since late December.
He repeated his warning that the central bank is concerned about recent rise in house prices and would not want to see the same pace of growth maintained.
Reporting by Naomi Tajitsu