RBNZ more likely to increase QE than implement negative rates - Goldman Sachs

Omkar Godbole FXStreet Contributor

The Reserve Bank of New Zealand (RBNZ) is unlikely to cut rates to levels below zero in the near future and could boost the quantitative easing, if required, according to analysts at Goldman Sachs.

The talk of negative rates gathered pace last week after Westpac said the coronavirus-induced economic downturn would force the central bank to cut rates to negative territory in November.

The RBNZ cut rates to 0.25% and announced a large scale asset purchase program in March to keep bond yields low and support wider economic activity.

The magnitude of the asset purchase program is quite significant with the bank committed to purchasing up to NZ $30 billion worth of NZ Government bonds by April 2021.

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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