KEY POINTS:
The Reserve Bank laid out $1.49 billion last month intervening in the foreign exchange market in a bid to slow the New Zealand dollar's rise - twice as much as it spent in June.
At the end of the month its net open foreign currency position had increased to $2.26 billion from $700 million at the end of June and from a foreign currency deficit of $58 million in May.
Despite the bank's selling, the kiwi climbed for most of July from US77c at the start of the month, reaching post-float highs of US80.6c and 76.7 on the trade-weighted index.
The appreciation was checked on July 26 when the bank raised the official cash rate for the fourth time this year, but said that would probably be it for the current cycle.
Bank of New Zealand economist Craig Ebert said any enduring impact from that statement depended entirely on subsequent data proving weak - as it had for retail spending and the housing market in particular.
"Otherwise it would have looked like wishful thinking."
The dollar's subsequent decline, to around US70c over the past couple of weeks, was mostly because of the turmoil in world financial markets.
"Substantially, it has been the global unwind of leverage," he said.
"It has come the Reserve Bank's way by good fortune rather than good management, I suspect."
The dollar is now 6 per cent below where the bank's economic projections in the June monetary policy statement had assumed for the second half of this year.
It closed at US70.18c yesterday.
Good Fortune
* The Reserve Bank sold 1.49 billion New Zealand dollars last month.
* The dollar traded between US76.1c and US80.6c over the month. So, with the dollar now trading at around 70c, the Reserve Bank has made money.
* But the dollar's recent decline is thought to have more to do with global risk aversion than the bank's intervention.
