RBNZ keep monetary policy steady, as expected
Reserve Bank of New Zealand keeps the cash rate at 0.25%
- LSAP ((large scale asset purchase programme) kept at NZD 100bn
- FLP (funding for lending programme) unchanged
RBNZ says that prolonged monetary stimulus remains necessary
- committee agreed it must remain prepared to provide additional support if necessary
- RBNZ says operational work to enable the OCR (Official Cash Rate) to be taken negative if required is now completed
- says committee agreed that monetary policy will need to remain stimulatory until inflation is sustained at 2%
- says economic outlook ahead remains highly uncertain
More, these from the minutes to the meeting:
- to maintain monetary stimulus until it is confident that consumer price inflation will be sustained around the 2 percent target midpoint and employment is at or above its maximum sustainable level
- committee expects a prolonged period of time to pass before these conditions are met.
- committee agreed that weekly changes in the lsap do not represent a change in monetary policy
- reduced government bond issuance was placing less upward pressure on New Zealand government bond yields
- committee agreed that it was prepared to lower the OCR to provide additional stimulus if required.
- risks to the economic outlook are balanced, in large part due to the anticipated prolonged period of monetary stimulus.
Still to come - RBNZ Governor Orr press conference at 0200GMT
- Preview - RBNZ monetary policy decision and statement due at 0100 GMT on Wednesday 24 February
- NZ shadow RBNZ board says there is little need for monetary policy change
- RBNZ monetary policy meeting 24 February - preview