RBNZ Minutes: Committee agreed any future move to a lower or negative OCR

The Reserve Bank of New Zealand’s (RBNZ) monetary policy decision was accompanied by the minutes of the meeting, which showed that board members will continue to provide additional stimulus as necessary.

Additional points

Policy will continue to provide support.

Commodity prices robust, partially offset by higher NZ$.

Committee directed RBNZ to actively prepare a package of additional monetary policy tools if needed.

Committee agreed any future move to a lower or negative OCR, if complemented by a funding for lending programme, could provide an effective way to deliver stimulus.

Central bank purchases could absorb a larger proportion of the total market than previously thought without affecting market functioning.

Larger LSAP programme would mean purchases could be front-loaded in order to put more downward pressure on wholesale interest rates.

Expanding the LSAP programme with the aim of adding more stimulus by lowering retail interest rates and the exchange rate.

Committee expressed a preference for considering a package of a negative OCR and a ‘funding for lending programme’.

Committee agreed further monetary stimulus needed to achieve its remit objectives.

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