Says OCR will remain at this level for at least 12 months
The RBNZ has started the week off by cutting rates by 0.75% to 0.25% (from 1.0%).
They say:
- Virus impact on the economy is significant
- NZ financial system remain sound
- Government plans broad-based economic stimulus
- If more stimulus required, prefer QE over rate cuts
- Banking system continues to function normally
- Committee agreed unanimously to keep OCR at 0.2.5 percent for at least 12 months
- Central bank says there will be no OCR review on 25 March 2020
- RBNZ delays the start of new capital requirements by 12 months
- Will consider whether further delays are necessary
- Taking action to help support lending in the economy
- Expects banks to maintain lending
- Estimates decision will allow NZ$47B more lending
I would guess that the global central bankers are in touch and that it the Federal Reserve may also announce a rate decision soon. On Friday, the market was pricing in nearly 100 bp cut.
