The RBNZ will keep the Official Cash Rate (OCR) at 0.25%.
The key points in the RBNZ statement are:RBNZ keeps the OCR unchanged at 0.25%Maintain the LSAP (large scale asset purchase) at NZD$60 billion.Committee prepared to use additional monetary policy tools /stimulus if necessaryCommittee will review LSAP at regular intervalsBalance of economic risks to the downsideRising NZD$ has put further pressure on export earningsMonetary Policy will continue to provide “significant support”The negative economic impact on New Zealand is exacerbated by the required international border restrictions, as the
vast majority of the world battles to contain the pandemic.RBNZ committed to meeting inflation and employment mandateCommittee discussed the pros and cons of expanding the LSAP programme nowAny expansion of policy would need to be driven by the economic outlook and assessment of the effectiveness of the
programmeA change in size of the programme would also need to be of sufficient magnitude to make a meaningful differenceStaff are working towards a broader range of monetary policy tools would be deployable in coming monthsTools include a term leaning facility, reductions in the OCR, and foreign asset purchases, as well as reassessing the
appropriate quantum of the current LSAPPossible negative outcomes from the global pandemic remain severe and larger than any near-term upside surprisesNot yet clear whether the monetary stimulus delivered to date is sufficient to meet its mandateThe negative economic impact on New Zealand is exacerbated by the required international border restrictions, as the
vast majority of the world battles to contain the pandemic.The severe global economic disruption caused by the COVID-19 pandemic is persisting, leading to lower economic activity,
employment, and inflation abroad and in New ZealandNew Zealand has contained the spread of COVID-19 locally for now, enabling a relaxation of social restrictions and an
earlier resumption of domestic economic activity than assumed in our May Monetary Policy Statement.The Government's intended fiscal stimulus, announced in its May Budget, was also slightly larger than we assumed.These outcomes give cause for some confidence, but significant economic challenges remain.
The NZD is lower in immediate response.
The next OCR decision will be held on the 12th August 2020
.Below is link to the RBNZ press release:
Current indicative levels are (market pricing is wide):NZD-USD 0.6470 / 0.6495NZD-AUD 0.9310 / 0.9335NZD-EUR 0.5715 / 0.5740NZD-GBP 0.5165 / 0.5190NZD-JPY 68.90 / 69.15