They don’t call it a “currency war” for nothing. 

Moments ago, the RBNZ cut rates by 25 bps to 2.25% in the latest shot across the bow in what is now a years-long race to the bottom.

Here are the bullets: 

• NEW ZEALAND CUTS KEY INTEREST RATE TO 2.25% FROM 2.50%
• RBNZ SAYS FURTHER EXCHANGE RATE DEPRECIATION IS APPROPRIATE
• RBNZ SEES INFLATION REACHING 2% IN 1Q 2018 VS 4Q 2017
• RBNZ SEES 4Q 2016 ANNUAL INFLATION AT 1.1% VS 1.6%

Cue the kiwi plunge:

RBNZ governor Graeme Wheeler apparently made up his mind last week:

• WHEELER: DECIDED TO CUT RATES LAST FRIDAY

But someone forgot to tell the PhD’s because 15 out of 17 economists surveyed by Bloomberg expected New Zealand to stand pat.

We don’t blame them. After all, who could have foreseen competitive easing in this environment?

Meanwhile, the RBNZ is going full-Kyle Bass on China:

• RBNZ SAYS DRAMATIC BUILD-UP IN CHINA CORPORATE DEBT TO “ENORMOUS” LEVEL
• RBNZ SAYS CHINA BUILDING AND MANUFACTURING SECTORS “VERY MUCH UNDER STRESS
• RBNZ SAYS CHALLENGE WITH CHINA IS IT IS BUILDING UP A NUMBER OF SERIOUS IMBALANCES