The Reserve Bank of New Zealand (RBNZ) aggressively expanded its quantitative easing programme and left the door open to a negative OCR, economists at Westpac Institutional Bank brief.
Key quotes
“The RBNZ expanded its Long Term Asset Purchase programme (LSAP) from $33bn to $60bn. […] The RBNZ also mentioned that, should more stimulus be required in the future, purchasing foreign bonds was a possibility.”
“The RBNZ certainly made it clear that it would adopt a negative OCR in the future if the situation required it and it was operationally feasible.”
“We are forecasting that the OCR will be reduced to -0.5% in November this year. We are the only major bank forecasting a negative OCR.”
“We expect inflation to remain low for longer, and unemployment to remain high for longer.”
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