New Zealand's central bank just cut rates unexpectedly and the kiwi is getting crushed (USD, NZD)

The New Zealand dollar is getting slammed after the country's central bank unexpectedly lowered rates.

The currency — nicknamed the kiwi — fell against the US dollar after the Reserve Bank of New Zealand lowered its official cash rate by 25 basis points to 2.25%.

In its policy announcement, the bank said the outlook for global growth had become more bleak since its December statement "due to weaker growth in China and other emerging markets, and slower growth in Europe."

The bank said that it might be necessary to add more policy stimulus to boost inflation. The bank pushed out its forecast for 2% inflation to Q1 2018 from Q4 2017.

The kiwi fell by as much as 1.20% to as low as 0.6670 against the US dollar. The Reserve Bank thinks the New Zealand needs to weaken further because the trade-weighted exchange rate is higher than it had projected and export prices are weak.  

Here's a chart showing the drop:

Investing.com

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