RBNZ to keep rate unchanged next week, no change seen for some time – Wells Fargo

Next Tuesday, the Reserve Bank of New Zealand (RBNZ) will have its monetary policy meeting. Analysts at Wells Fargo expect the central bank to hold the key rate at 0.25% and they do not foresee changes for some time in rates. 

Key Quotes: 

“At the May 12 monetary policy meeting, the Reserve Bank of New Zealand (RBNZ) unleashed large stimulus measures aimed at cushioning the economy against the negative effects of COVID-19. The committee agreed to substantially expand its Large Scale Asset Purchase program to NZ$60B (~19% of GDP) from the previous limit of NZ$33B (~10% of GDP).”

“Since the May policy meeting, the outlook for the NZ economy has improved. The NZ government removed all of its remaining lockdown restrictions and social distancing requirements, except for strict border control measures after the nation reported it eliminated COVID-19. Although NZ is likely to still fall into a deep recession, we expect the re-opening of its economy will help limit longer-term economic damage. Against that backdrop, we expect the RBNZ to hold the Official Cash rate at 0.25% at the upcoming meeting, and do not foresee the central bank moving rates in either direction for some time.”