RBNZ leave the official cash rate on hold as expected, unchanged QE program
Reserve Bank of New Zealand monetary policy decision for June 2020
- OCR left at 0.25%
- LSAP left at NZD 60bn
- Policy committee is prepared to use additional monetary policy tools as necessary
- will review large scale asset purchase amounts at regular intervals
- New Zealand has contained the spread of COVID-19 locally for now, enabling a relaxation of social restrictions and an earlier resumption of domestic economic activity than assumed in our May Monetary Policy Statement.
- The Government's intended fiscal stimulus, announced in its May Budget, was also slightly larger than we assumed.
- These outcomes give cause for some confidence but significant economic challenges remain.
- The severe global economic disruption caused by the COVID-19 pandemic is persisting, leading to lower economic activity, employment, and inflation abroad and in New Zealand.
- The negative economic impact on New Zealand is exacerbated by the required international border restrictions, as the vast majority of the world battles to contain the pandemic.
- The appreciation of New Zealand's exchange rate has placed further pressure on export earnings.
- The main support for the economy in this environment is appropriately being provided through increased fiscal spending. However, monetary policy will continue to provide significant support.
- the balance of economic risks remains to the downside.
Bolding is mine.
---LSAP assets are New Zealand Government Bonds, Local Government Funding Agency Bonds, and NZ Government Inflation-Indexed Bonds.