New Zealand cuts interest rate to record low 1.

75 pct
WELLINGTON, Nov. 10 (AFP)
New Zealand's central bank cut its benchmark interest rate to a record low of 1.75 percent on
Thursday, citing global uncertainty caused in part by Donald Trump's shock US election victory.
The Reserve Bank of New Zealand said it planned to trim its Official Cash Rate (OCR) by
0.25 points anyway but reaffirmed the decision in the wake of Trump's win. "Political
uncertainty remains heightened and market volatility is elevated," Governor Graeme Wheeler
said.
Asked if he was referring to the US election result, Wheeler replied: "It's one of the risks.
"There's uncertainty about a lot of things... we've seen a result overnight that has clearly
surprised the market," he added.
But he said other political factors were also worrying the markets, including Brexit and
Chinese Communist Party General Secretary Xi Jinping's consolidation of power in Beijing.
Wheeler said another reason for the rate cut was New Zealand's stubbornly low inflation, which
has been below the bank's 1.0-3.0 percent target for the past two years.
He said projections indicated this would soon change, meaning Thursday's downward move
may be the last in the current easing cycle. "At this stage, we think that we won't need another
cut but if circumstances justified it, we'd look very closely at the data," he told reporters.
New Zealand's economic growth has remained strong at 3.6 percent in 2015/16, despite an
international downturn in dairy, one of its major exports. The New Zealand dollar has also defied
expectations and remained buoyant, frustrating the central bank, which wants to bring it down to
help exports.
The currency rose 0.64 US cents to 73.59 US cents after Thursday's announcement. Analysts
were expecting the rate cut, which had been flagged several times by the central bank. Westpac
economist Imre Speizer said it appeared the bank was taking a neutral stance on further
reductions after the current round of cuts began in July 2014, when the benchmark rate was 3.50
percent. "This suggests a period of policy stability ahead," he said.
However, Paul Dales of Capital Economics said the bank had taken "a leap of faith" in
predicting inflation was set to rise and it might be forced into one more cut. "We still think that
low inflation may prompt another cut to 1.5 percent," he said.

Britain Holds Talks With China to Seek Investment After

Brexit
LONDON, Nov. 10 (Bloomberg)
Prime Minister Theresa May and Chancellor of the Exchequer Philip Hammond are holding
talks with Chinese Vice Premier Ma Kai as Britain pushes for investment following the Brexit
vote.
The so-called U.K.-China Economic and Financial Dialogue Thursday will cover trade,
financial services, infrastructure and energy, with the government detailing a portfolio of
potential investments in northern England for Chinese businesses, the Treasury said in a
statement.
May, who has just returned from a visit to India that was dominated by a dispute over visa
access, will hope for more success with the Chinese delegation as she tries to show Britain is
actively forging trade deals outside the European Union. Ma will also meet Bank of England
Governor Mark Carney.
Im determined that as we leave the European Union, we build a truly global Britain that is
open for business," May said in a statement. "I am excited about the opportunities for expanding
trade and investment between our two countries.
The Treasury announced that CITIC Construction will invest 200 million pounds ($250
million) in phase 1 of the 1.7 billion-pound London Royal Albert Docks project, being developed
by Chinese developer ABP.
The government will also invest as much as 40 million pounds in the Asian Infrastructure
Investment Bank in Beijing to help developing countries prepare infrastructure programs.