KEY POINTS:
The Reserve Bank spent more than $700 million in its first foray into foreign exchange market intervention in June.
Figures released by the bank yesterday showed it was a net seller of New Zealand dollars to the tune of $736 million that month.
That is in stark contrast to the average movement of $6 million, in both directions, during the previous year.
Goldman Sachs JBWere economist Shamubeel Eaqub said the central bank was also thought to have intervened again after its official cash rate increase on July 26, which was accompanied by a statement that it did not expect to have to raise the OCR again.
He expected the bank to continue to sell the dollar. But such interventions by central banks tended to have only a short-term impact, Eaqub said.
Sustained depreciation of the kiwi would require a flow of economic news consistent with a slowdown and potential easing by the Reserve Bank.
The bank is expected to eventually make money on the intervention as the kiwi falls below levels at which it sold out.
