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%
• Increases the LSAP (large scale asset purchase) at NZD$100 billion (this was a larger than expected).
• Policy will continue to provide support
• Will provide additional stimulus as necessary
• Commodity prices robust, partially offset by higher NZD
• Committee directed RBNZ to actively prepare a package of additional monetary policy tools if needed
• Committee agreed any future move to a lower or negative OCR (official cash rate), if complemented by a funding for lending programme, could provide an effective way to deliver stimulus
• RBNZ purchases could absorb a larger proportion of the total market than previously thought without affecting market functioning
• Larger LSAP programme would mean purchases could be front-loaded in order to put more downward pressure on wholesale interest rates
• Expanding the LSAP programme with the aim of adding more stimulus by lowering retail interest rates and the exchange rate
• QE eligible assets remain same
• Agreed that package of additional monetary instruments must remain in active preparation
• Package includes a negative OCR
• Purchase of foreign assets remain an option
• Output and employment have recovered sooner than projected
• Any significant change in the global and domestic economic outlook remains dependent on the containment of the virus
• Purchase of foreign assets remains an option
• Output and employment have recovered sooner than projected
• Any significant change in global outlook and domestic economic outlook remains dependent on the containment of the virus

The ZD is lower in immediate response.

An RBNZ press conference will take place at 3pm -

https://www.rbnz.govt.nz/research-and-publications/webcasts

The next OCR decision will be held on the 23rd September 2020.

Below is link to the RBNZ press release:

https://www.rbnz.govt.nz/news/2020/08/further-easing-in-monetary-policy-delivered

Current indicative levels are (market pricing is wide):

NZD-USD 0.6535 / 0.6560

NZD-AUD 0.9185 / 0.9210

NZD-EUR 0.5575 / 0.5600

NZD-GBP 0.5015 / 0.5040

NZD-JPY 69.70 / 69.75

NZD-CAD 0.8725 / 0.8750

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