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XE Data Update - RBNZ Governor & Assistant Governor Speaking Before Parliamentary Committee

RBNZ Governor Adrian Orr & Assistant Governor Christian Hawkesby have been speaking before a parliamentary committee.
Their key points are:

  • Monetary policy can only soften the blow from covid-19
  • Banks entered the pandemic in a strong position
  • The economic shock is a fiscal policy challenge, with monetary policy a support player
  • Persistent unemployment is the biggest challenge for banks
  • RBNZ has not ruled out negative interest rates (not ‘off the table’)
  • Says ‘shadow OCR’ is significantly negative
  • RBNZ’s economic views are similar to the Treasury Dept
  • Able to increase QE (quantitative easing) as Government increases borrowing
  • Without QR NZ would be facing deflation
  • Demand rebound will be sluggish
  • In lockdown, economy running 35% below normal
  • At level 3, economy running between 20-25% below normal
  • Sees Government net debt/GDP rising to historical average
  • Very please with effective stimulus created to date

The NZD is lower in immediate response.

The next OCR decision and monetary policy statement will be on the 13th May 2020.

Current indicative levels are:

NZD-USD 0.5945 / 0.5970

NZD-AUD 0.9465 / 0.9490

NZD-EUR 0.5460 / 0.5485

NZD-GBP 0.4755 / 0.4780

NZD-JPY 64.00 / 64.25

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