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New Zealand’s economy needs less fiscal or monetary policy support than previously thought, former Reserve Bank of New Zealand (RBNZ) Chief Economist Sharon Zollner said in an MNI interview.  

Additional quotes

“Lower-than-expected government borrowing and economic recovery mean the RBNZ is unlikely to reach the NZD100 billion cap on its bond-buying program by the target of June 2022. “

“The QE program is fading into the background as the government issues few bonds and the economy recovers.”

Commenting on this week’s RBNZ decision, Zollner said the bank has “the luxury of waiting before they make the next call.”

While economic data was mixed, 2021 would “not be a deflationary year”, but at the same time “the hurdle to either raise or cut rates is high.”

“There is a high tolerance for inaction.”

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