- Comments from the RBNZ officials failing to sink the bird any lower.
- Orr says positive interest rates at low levels are just as effective as ever.
RBNZ Governor Orr has said that in the absence of consumers, businesses or government spending as expected “we will have to lower the interest rate further.”
Key quotes from Orr and RBNZ assistant governor:
- Orr says easily within errors of the margin of forecasts to end up in a position where negative interest rates needed to stimulate the economy.
- Orr says the threat of us-china trade issues has lingered too long, creating global economic uncertainty.
- RBNZ assistant governor says us-china issues ‘a major part’ of lower than expected domestic business confidence.
- Orr says positive interest rates at low levels are just as effective as ever.
- Orr says in the absence of consumers, businesses or government spending as expected we will have to lower the interest rate further.
FX implications
These comments are dovish and follow yesterday’s surprise 50 basis point cut. However, the Kiwi is unchanged in early Asia around 0.6442/45. Overnight, the bird actually managed a modest rebound after plummeting to its lowest point since January 2016.
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