By Joe Helm
Only a 45-point jump in the value of the New Zealand dollar to 52.9USc disturbed the calm yesterday as financial markets adjusted to life under the new official cash rate regime introduced by the Reserve Bank on Wednesday.
The wholesale money market remained quiet and yields little changed.
The 90-day bank bill yield gained a solitary point to 4.66 per cent, remaining within the expected 15 to 20 point premium over the 4.5 per cent official cash rate.
Longer-dated Government stock yields climbed two or three points but shorter dated yields were steady.
Foreign exchange dealers attributed the 45 point jump in the value of the New Zealand dollar to firmer international commodity prices, especially for oil.
That boosted the Australian dollar, which rubbed off onto the kiwi.
Both money and foreign exchange dealers said the only factors which might disturb the calm were the announcement next week of December quarter balance-of-payments and GDP figures. If they were outside expected ranges some volatility could be expected.
The calm on money and foreign exchange markets did not flow through to the equities market where the NZSE40 index fell 1.3 per cent.
Much of the fall was due to a 13c fall to $9.13 for Telecom which came under pressure from investors selling to raise cash to pay for the forthcoming call on Telecom instalment receipts.
Yesterday was the last day for trading those receipts.
All quiet on the (new cash rate regime) financial front
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