Credit Rating agency, Fitch Ratings has lowered the New Zealand credit rating from “stable” to “negative”.
The New Zealand Dollar (Kiwi) fell against all of its major trading partners upon the release of the news that the New Zealand credit rating has fallen. On announcement day, the Kiwi fell from 64.61 US Cents, to 63.89 US Cents. Against the Australian Dollar, the Kiwi fell .55 cents, and .53 against the Yen.
The rating change by Fitch is not necessarily conceded between all ratings agencies. Goldman & Sach’s raised its outlook on New Zealand at its last revision. Bernard Doyle, New Zealand Strategist at Goldman Sachs JBWere stated that the move by Fitch was unexpected but at the same time unsurprising, and that New Zealand was treading a fine line between being economically healthy and failing to stabilize its external debt.
Comments from Fitch indicate that New Zealand’s current account deficit is the key behind this decision, and any possible reversal.