RBNZ: Funding for Lending Programme to stay until December, as planned

Dhwani Mehta FXStreet

“The Funding for Lending Programme (FLP) is working largely as planned and it'll be staying in place until its scheduled end in December,” the Reserve Bank of New Zealand (RBNZ) responded when Interest.co.nz asked a series of questions about the FLP.

The FLP was launched by the RBNZ in December 2020 to provide additional monetary stimulus to the economy.

Additional takeaways

"The FLP is scheduled to end in December 2022. The commitment to the FLP is important to ensure this tool remains credible for future use if required.”

"The drawdown window for the initial allocation of the FLP closed in June 2022. This allocation was roughly two-thirds utilized and any unutilized portion is no longer available. The additional allocation remains open until December 2022."

“The FLP has worked broadly as intended and as expected. We can best observe this by considering the spread between household/business lending rates and wholesale interest rates, i.e. swap rates.”

Market reaction

NZD/USD is defending 0.6250, at the time of writing, almost unchanged on the day.

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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