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New Zealand Monetary Policy June 2020

New Zealand: RBNZ stands pat in June

On 24 June, the Reserve Bank of New Zealand (RBNZ) decided to leave the Official Cash Rate (OCR) unchanged at its historic-low level of 0.25%. Moreover, it reaffirmed it will stick to its asset purchasing program in order to keep borrowing costs pinned down and help the economy to recover from the impact from Covid-19. The RBNZ maintained the size of its Large-Scale Asset Purchase program (LSAP) at NZD 60 billion, although stated it could ramp up the program if needed. Although a faster-than-expected relaxation of lockdown measures and supportive fiscal and monetary stimulus are already translating into encouraging signals, notable uncertainty continues to surround the outlook, with risks tilted to the downside due the unpredictable evolution of the virus globally.

The Bank stands ready to use additional monetary policy tools if needed, such as further cuts to the OCR or the expansion of its LSAP.

The next monetary policy meeting is scheduled for 12 August.

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