Shares fall as investors call RBNZ's bluff

Today, the central bank reiterated prolonged monetary stimulus remains necessary and held the official cash rate at a record low 0.25%, saying the economic outlook was still “highly uncertain”.

However, investors were unconvinced the RBNZ would really hold interest rates at that low rate for as long as they had promised.

Head of fixed income at Fisher Funds, David McLeish said the absence of an official cash rate projection was “very telling”. 

“That indicates to me that they didn’t want to tell us what everyone really knows; which is that the chance is for an official cash rate rise next year –– and a very slight chance of one this year –– have risen dramatically,” he said.