RBNZ keep monetary policy steady, as expected

Author: Eamonn Sheridan | Category: Central Banks

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 

For background:

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