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According to analysts at ANZ, for the RBNZ, an OCR of -0.25% or even lower is technically possible.

Key Quotes

“At some point a lower OCR becomes ineffective and beyond that, potentially outright contractionary. Where this point might lie is highly uncertain.”

“There is a risk that the mortgage credit channel becomes ineffective if the OCR goes below +0.50%. An OCR below -0.25% is unlikely to be passed through to corporate borrowers, given ‘zero floors’ in contracts. But the NZD channel is likely to still be effective down to even lower levels of the OCR.”

“Overall, we are not at all certain that the impact of a negative OCR across all channels would be net stimulatory.”