XE Data Update - RBNZ Official Cash Rate Decision - NZD Lower
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 2020
- To 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 further
- The Monetary Policy Committee is committed to achieving its employment and inflation objectives
- Monetary Policy will continue to provide significant support through keeping interest rates low for the foreseeable future
- Expects to see retail interest rates fall further
- Forecasts OCR at 0.25% in March 2021
- Forecasts 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 programme
- Banking system is sound and markets functioning satisfactory
- Committee agreed that risks are to the downside of the baseline scenario
- Agreed that a ‘least regrets’ monetary policy approach is needed, delivering stimulus sooner rather than later
- More 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