RBNZ has decided to keep interest rates unchanged at 0.25%, while keeping its QE package at NZ $60 billion. The most prominent points of the monetary policy statement were as follows:
The bank is willing to take all measures if necessary.
It will always review the size of the asset purchase program.
New Zealand has succeeded in containing Coved 19 locally.
The country will begin to ease social restrictions and encourage the resumption of economic activity.
The fiscal stimulus the government plans to announce in its May budget was slightly greater than we assumed.
These results give some confidence, but there are still major economic challenges.
The severe global economic turmoil caused by the COVID-19 pandemic continues, leading to lower economic activity, employment and inflation.
The negative economic impact on New Zealand is exacerbated by the required international border restrictions, as most of the world is struggling to contain the pandemic.
The currency's high exchange rate has put more pressure on exports.
The main support to the economy in this environment is provided appropriately by increasing financial spending.
Nevertheless, monetary policy will continue to provide significant support.
