RBNZ Minutes: OCR left unchanged in light of the current level 4 lockdown and health uncertainty
The Reserve Bank of New Zealand (RBNZ) published the minutes of its August monetary policy decision, in which the central bank kept the OCR on hold amid fresh covid lockdown n the country.
Key takeaways
In light of the current level 4 lockdown and health uncertainty, the committee agreed to leave the OCR unchanged at this meeting.
Committee agreed that their least regrets policy stance is to further reduce monetary policy stimulus.
Committee discussed the merits of an increase in the OCR at this meeting and considered the implications of alternative sequencing of OCR changes over time.
Members now had more confidence that rising capacity pressures will feed through into inflation, and that employment is at its maximum sustainable level.
Members concluded that they could continue removing monetary stimulus, following their decision to halt additional purchases of government bonds under the LSAP programme at their July meeting.
Committee reiterated that the OCR is currently the preferred tool to adjust the level of stimulus in the economy.
Committee noted that a number of factors are expected to weigh on house prices over the medium term.
Members expressed uncertainty about how quickly momentum in the housing market will recede.
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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.
