Surprising the markets, New Zealand Finance Minister Michael Cullen stated in an interview that the countrys central bank will likely pass on further rate hikes, as rate cuts may not be introduced until 2008. The finance minister also commented on the recent runup of the commodity currency, indicating that the recent spurt of demand looks to be speculatively driven with hedge funds taking short term positions, betting they can get out in time and not lose should the major decline. Subsequently, the comments are contrary to Reserve Bank of New Zealand Governor Alan Bollards statements following the decision to stay at the current 7.25 percent rate and will likely weigh heavily heading into the GDP report later on in the week.
