The NZD to SBD exchange rate is currently range-bound and trading just below its three-month average.
Key drivers include:
- The interest rate differential remains narrow, with expectations of rate cuts from the Reserve Bank of New Zealand likely pressuring the NZD.
- The Solomon Islands has approved a significant budget supporting infrastructure projects, which should bolster economic growth and strengthen the SBD.
- Recent New Zealand GDP figures were strong, but had limited impact on NZD sentiment.
Over the near term, the NZD/SBD exchange rate is expected to trade within a moderate range, reflecting the current market’s stability and uncertainty.
Upside risk could arise from stronger-than-expected trade figures from New Zealand that could support the NZD, while downside risk is linked to potential RBNZ rate cuts that may weigh on the currency’s performance.