The inflationary pressures were coming from their own policy of 0% interest rates and printing money some 12 months earlier. As is transpired, they were too late in increasing interest rates in late 2021 and earlier this year. Since than the NZ dollar has been sold down more heavily than many other currencies against the rampant US dollar on global currency markets. As a result of the NZ dollar under-performance the NZ Trade Weighted Index (TWI) has fallen away to 68.8 on 23 September. The RBNZ cannot just dismiss the currency depreciation as caused by US interest rates rising up to the level of NZ interest rates and therefore nothing to do with them.

Source: New Zealand Herald September 26, 2022 01:25 UTC