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New Zealand dollar gains as central bank chief dims likelihood of negative rates

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New Zealand dollar gains as central bank chief dims likelihood of negative rates

The New Zealand dollar rose against its U.S. counterpart after the country's central bank chief downplayed the prospect of alternative monetary policies, such as negative interest rates, amid a global easing trend, though he said rate-setters must be prepared in case the need for one arises.

"Our current view is that we are unlikely to need 'unconventional' monetary policy tools. But we would be remiss not to be prepared," Reserve Bank of New Zealand Governor Adrian Orr said in a Sept. 26 speech, a day after the central bank held its key interest rate and left the door open to further monetary policy stimulus.

The New Zealand dollar rose nearly 0.5% versus the U.S. currency as of 1:26 a.m. ET.

Orr's remarks come after People's Bank of China Governor Yi Gang said earlier in the week that China is "not in a hurry" to follow other central banks in pursuing significant interest rate cuts and quantitative easing policies.

Orr added that the government's "books are in good shape" on the back of a "trifecta of sound government finances, clear infrastructure demands and low hurdle rates for investing."