The kiwi is going bananas

The New Zealand dollar jumped against the US dollar after the country’s central bank announced an interest-rate cut to a record low on Wednesday.

In a statement, Reserve Bank of New Zealand cut its Official Cash Rate (OCR) by 25 basis points to 1.75%, as economists had expected, saying it expects inflation to rise in 2017.

“Our current projections and assumptions indicate that policy settings, including today’s easing, will see growth strong enough to have inflation settle near the middle of the target range,” the bank said.

The currency pair gained 0.41% to 0.7356 at 3:05 p.m. ET.

“Annual CPI inflation was weak in the September quarter, in part due to lower fuel prices and cuts in ACC levies,”the bank said. “Annual inflation is expected to rise from the December quarter, reflecting the policy stimulus to date, the strength of the domestic economy, and reduced drag from tradables inflation.”

NOW WATCH: A hacker reveals a simple way to come up with a strong password that’s easy to remember

NOW WATCH: Money & Markets videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at