[New Zealand Dollar Fixed Deposit] New Zealand dollar fixed deposit interest rate up to 16.8%. Citibank expects New Zealand's interest rate to remain at 2.25% this year.

After the Easter long holiday, we’re stepping into the month when global central banks hold monetary policy meetings. The focus is mainly on the end of the month, with Japan, Canada, and the U.K./Europe meeting in succession. The highlight is the Federal Reserve’s policy decision on April 30 (early morning Hong Kong time), its third rate decision of the year. Leading off will be New Zealand’s meeting tomorrow (April 8). U.S. investment banks expect the Reserve Bank of New Zealand to keep rates unchanged for a consecutive 3 times, keeping the policy interest rate at 2.25%.

Tap the chart 👇👇👇👇 for a 7-day comparison of NZD time deposit rates

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Citi Bank’s investment strategy and asset allocation head, Liu Ka-ho, says this year’s total for the NZ central bank won’t cut rates, and there are currently also no conditions for a rate hike. Among commodity currencies, the Aussie dollar remains the most favored.

Liu Ka-ho added that Citi analysts maintain a medium-term bullish view on AUD/USD, mainly for three reasons:

（1）Based on Australia’s economic resilience, and global economic expectations gradually improving;

（2）The Reserve Bank of Australia is inclined to hike rates. It is expected to raise the rate for the third time this year in May, while the Federal Reserve may cut rates later in the year;

（3）It may encourage Australian investors holding U.S. assets to raise their FX hedging ratio, increasing the selling of USD and buying of AUD.

Looking ahead at the AUD/NZD path, Liu Ka-ho expects:

• AUD/USD: 0.67 for the 3-month forecast; 0.71 for the next 6 months to 1 year; long-term target 0.7
• NZD: 0.54 for the 3-month forecast; 0.58 for the next 6 months to 1 year; long-term target 0.63
• CAD: 1.41 for the 3-month forecast; 1.37 for 6 to 12 months; long-term target 1.39

Today (April 7), the NZD was at 0.5693, down about 1.1% from 0.5758 at the end of last year.

Central banks issuing money in China: Add to short-term deposit interest aggressively against the trend

As for NZD time deposit interest, although the market expects New Zealand’s rate-cutting cycle has ended, there are still no conditions to turn around and hike rates. However, Hong Kong banks’ stance toward NZD fixed deposits varies. The biggest surprise is that Bank of China Hong Kong has raised its fixed-deposit interest rates against the trend; whereas the other five banks are chasing the rate-cut express—for example, Standard Chartered, and so on.

As for the 3-month term, even though China Construction Bank (Asia) offers 6.88%, it only applies to the first 25% of deposits. The remaining 85% earns 2.2% based on the counter rate. Since it’s harder to calculate the average interest rate, it’s therefore not listed as the top interest rate for this term. At present, the four major banks (HSBC, Bank of China, Hang Seng, and Standard Chartered), as well as CCB (Asia), all offer 2.2%, making a rare “five-way king” situation.

When it comes to the “high-interest king,” at the start of April, CCB (Asia) maintained 16.8% for 7-day deposits, thus continuing to take the top spot for the highest interest rates across the whole city.

NZD fixed deposits: Fierce battle for 3-month terms, with mainland players fighting it out among four major banks

Competing for 7-day NZD short-term deposits:

• CCB (Asia) 16.8%
• Fubon 15.38% (cut 3.5% in early June last year)
• Hang Seng 15% (for exchanging HKD 1 million)
• HSBC 14% (only for eligible new funds)
• Guoyou 13.88%
• BOC Hong Kong 13.8% (added 0.8% in March)
• HSBC and Hang Seng (for exchanging the equivalent of HKD 10k) are both 13%
• Standard Chartered 12.8% (cut 1% in March)
• Nanyang Commercial Bank 12%
• DBS 10% (“branch opening” originally had 16% high interest, but in April it was cut by 6%, bringing the current rate in line with the “online offers” to 10%)
• Chong Hing 1%
• ZA Bank 0.01%

Other high-interest rankings for short-to-long terms:

• 1 month: Fubon 5.38% (cut 1.7% in June last year)
• 3 months: HSBC, BOC, Hang Seng, Standard Chartered, and CCB (Asia) 2.2%
• 6 months: BOCOM 2.15%, WeLaB Bank 2%
• 1 year: CCB (Asia) 2.35%

Standard Chartered + DBS cut 7-day annual interest

Latest developments in NZD fixed-deposit interest:

Hikes:

• BOC Hong Kong raised 7-day interest by 0.8% to 13.8%

Cuts:

• DBS drastically lowered 7-day annual interest (for branch opening) by 6%, with the rate barely holding above 10%
• Standard Chartered cut 7-day by 1% to 12.8%
• CCB (Asia) slightly decreased the 3-month rate by 0.05% to 2.2%
• Chong Hing lowered 14-day and 1-month by 0.1%. Currently 14 days is 1%, and 1 month is 1.1%
• Public Bank cut 1-month by 0.1% to barely keep above 0.9%

Gulf crisis risk currencies severely battered; NZD evaporates this year’s upside

On the other side, the NZD’s near-term trend:

• Citi Liu Ka-ho: Before the Middle East situation shows clear signs of cooling, we expect the U.S. Dollar Index may test 103 higher. But AUD/NZD could trade within a stronger support range; the Aussie support level is around 0.685, and NZD around 0.5703
• OCBC Hong Kong economist Wang Hao-ting: In the next two weeks, the support level for NZD/USD is expected to be 0.57 (vs HKD 4.4678); the resistance zone is 0.5858 (vs HKD 4.5916). By mid-year, it’s forecast at 0.6, with a year-end target of 0.61. With the Middle East fighting so far, risk currencies have been hit. Although New Zealand benefits from energy exports, under a risk-avoidance atmosphere the NZD remains fragile. However, the country’s economic recovery momentum is still strong, and the bullish view on the NZD remains unchanged
• Technical chart trend: Since late January, the NZD has been falling in steps and already broke the 0.6 psychological level. Even more, since late February when the U.S. and Israel attacked Iran, it has plunged again; the current level is below 0.58, much farther from the early-July last year high of 0.6122.

The NZ central bank keeps pouring cold water; hopes for rate hikes fail

Additionally, looking back at the previous central bank meeting on February 18: as expected, it kept rates unchanged, maintaining 2.25%, but the remarks by Anna Breman, the first female governor to preside over the meeting, were more dovish. She said the stance of monetary policy still needs to remain accommodative for a period to support economic recovery. That day, after the NZD broke through 0.6, selling pressure increased and it once fell close to the February 6 low of 0.5928.

Back in early this year, markets bet that New Zealand might raise rates early by 0.25%, which at one point boosted the NZD’s upside move, beating the AUD. However, as the NZ central bank’s repeated hints of rate-hike speculation cooled down sharply, the NZD ended up down 0.1% in the first quarter.

It’s worth noting that the NZ central bank said clearly that the progress of the recovery in New Zealand’s labor market has not given the authorities enough confidence to hike rates, and it even used “unconventional wording”: it described the economic situation as “contrary to common sense,” meaning economic growth is strong but inflation is slowing.

The NZ central bank’s monetary policy committee also expects inflation to move back toward the 2% target, and forecasts that by March 2027 the economic growth rate will accelerate to 2.8%. Meanwhile, the neutral cash rate (i.e., neither stimulating nor suppressing economic activity) is around 3%, which is the current official rate of 2.25% plus 0.75%. However, it will need to rise gradually to that level by the end of 2027.

NZD fails to hold the 0.6 level after war tariffs hit

Finally, one more thing: over the past year, the NZD has played a roller coaster. Today last year, after tariffs hit, on April 9 last year the NZD plunged sharply—at one point breaking below the 0.55 level, a five-year low—briefly showing 0.5486, the first time since March 2020. At that time, as the tariff war was in full swing, Trump imposed reciprocal tariffs on the world on “Liberation Day” (April 2). After that, China adopted countermeasures, disrupting global stocks, bond markets, and credit, leading to risk currencies being dumped heavily.

But soon after, the situation turned sharply the other way. As the world reduced its holdings of U.S. dollar assets, on April 11 last year the U.S. Dollar Index fell below 100 for the first time. Commodity currencies seized the opportunity to rebound strongly. The AUD surged as much as 0.61% to 0.6415, and the NZD also rose above the 0.6 level for the first time in half a year.

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