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The Reserve Bank of New Zealand (RBNZ) held its monetary policy meeting on the 28th and, to the market's surprise, kept the Official Cash Rate (OCR) unchanged at 2.75%, with the Monetary Policy Committee approving the decision by a narrow 4-3 margin. Because most economists had bet on a quarter-point hike, the New Zealand dollar tumbled as much as 1.7% against the US dollar to 0.5586 after the news, the benchmark NZX 50 equity index fell 0.5% in tandem, and the policy-sensitive two-year government bond yield dropped 12 basis points to 3.82%. Of 25 economists surveyed by the media, only 2 expected rates to stay on hold, with the rest forecasting the central bank would raise the rate to 3.00%.
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