NZ dollar surges after OCR hold

The New Zealand dollar surged after the Reserve Bank kept the official cash rate (OCR) at 2.5 per cent but suggested it could start hiking rates earlier than previously indicated.

The NZ dollar actually started heading upwards from around US70.80c about 7am and by 9am, when the rate decision was announced, was at US71.20.

Within minutes of the announcement, the kiwi was up to US71.75c, and around 9.45am briefly squeezed above US72c for the first time this week.

In his statement today, Reserve Bank Governor Alan Bollard said that if the economy continued to recover, conditions may support beginning to remove monetary stimulus around the middle of 2010.

Previously he had indicated he did not expect the OCR to rise until the second half of 2010.

- NZPA