The RBNZ will keep the Official Cash Rate (OCR) at 0.25%. The key points in the RBNZ statement are:RBNZ keeps the OCR at 0.25%See the OCR at 0.25% in September 2020To significantly increase Large Scale Asset Purchase (LSAP) of Government Bonds to NZD$60 billion (up from $30 billion)Prepared to use additional monetary policy tools if and when needed including reducing the OCR furtherThe Monetary Policy Committee is committed to achieving its employment and inflation objectivesMonetary Policy will continue to provide significant support through keeping interest rates low for the foreseeable
futureExpects to see retail interest rates fall furtherForecasts OCR at 0.25% in March 2021Forecasts June quarter GDP at -21.8%Other tools the RBNZ mentioned in their minutes include further OCR reductions; a term lending facility; and adding
other asset classes, such as foreign assets, to the LSAP programmeBanking system is sound and markets functioning satisfactoryCommittee agreed that risks are to the downside of the baseline scenarioAgreed that a ‘least regrets’ monetary policy approach is needed, delivering stimulus sooner rather than laterMore stimulus is needed to support medium-term recovery in economic activity, employment and inflation
The NZD is lower in immediate response.
RBNZ Governor Adrian Orr will be condusting a press conference at 3pm.
The next OCR decision will be held on the 24th June 2020.
Below is link to the RBNZ press release:
Current indicative levels are
:NZD-USD 0.6025 / 0.6050NZD-AUD 0.9320 / 0.945NZD-EUR 0.5545 / 0.5570NZD-GBP 0.4905 / 0.4930NZD-JPY 64.55 / 64.80