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.

Reserve Bank of New Zealand monetary policy decision for June 2020