NZ Treasury: Economic activity has fallen abruptly as Govt responds to the coronavirus-led health risks


New Zealand’s (NZ) Treasury is out with its monthly economic indicators report, with the key takeaways found below.

Economic activity has fallen abruptly as the Government responds to the health risks posed by COVID-19.

Fiscal and monetary policy are helping ease the disruption to household and business income.

Across the world, lockdowns and physical distancing measures are becoming pervasive, bringing a broad swathe of global economic activity to a sudden stop, cutting incomes and disrupting financial markets.

In a rapidly changing environment, it is difficult to gauge the magnitude of the implications for economic activity.

However, it is clear that GDP, household spending, business investment and services exports have declined sharply.

Meanwhile, the Reserve Bank of New Zealand (RBNZ) said in a statement on Thursday, it will buy NZ$1800 million of government bonds maturing from 2023 to 2037.

The central bank also said it will BUY NZ$150 million local government agency bonds maturing from 2021 to 2027. This comes after the RBNZ expanded its asset purchases program to help support the economy.

NZD/USD reaction

NZD/USD is attacking 0.6000 on the downbeat NZ Treasury report, as bears fight back control amid risk-off action in the Asian equities, with virus worries back in play.

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