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Moody’s Investors Service is out with its new credit review report on New Zealand’s economy, with the key highlights found below.

“Very strong institutions and policy effectiveness.”

“A robust fiscal position compared with peers …  ample fiscal flexibility to respond to both long-term spending needs related to social demands, or a potential sudden rise in expenditure to support the economy in a subsequent downturn.”

“External risks stem from  the country’s reliance on soft commodities exports and its net international liabilities, which despite having narrowed, remain large compared with Aaa-rated peers.”  

“We expect New Zealand’s economy to remain resilient in the face of external headwinds because of its trade openness, diverse and competitive agricultural export base, flexible labour and product markets, high wealth levels and supportive demographics, driven by solid net immigration.”

“Maintain stable outlook on the Aaa rating, adding that “a negative rating action is unlikely in the near term.”

Market reaction

NZD/USD is wavering in a familiar range below 0.7200 following the above report and in line with expectations NZ CPI data.

The spot was last seen trading at 0.7174, almost unchanged on the day.