Reserve Bank of New Zealand Assistant, Governor Hawkesby, said in an interview:

Key notes

  • Hawkesby notes that the Bank is "very open" to altering the size of its QE program, highlighting that the Bank didn't know the exact size of the NZ DMO's
  • Q4 issuance program at the time it implemented unconventional MonPol.
  • Hawkesby also stressed that there is a limit re: Percentage of the market that the RBNZ can hold under QE (pointing to somewhere in the region of 40-50% holdings for any individual issue, to promote smooth market functioning), and noted that the Bank is considering widening the assets that it can buy under QE, with inflation-linked bonds "on the list" that is being considered.
  • Hawkesby also noted that banks weren't operationally ready for negative rates and the RBNZ had given them an assurance that was off the table for the time being. However, he did note that the central bank is "open minded" about a negative OCR, as he stated that "there could well be point down the track, where time passes, that we do have a negative official cash rate somewhere, sometime in the future."

– Market News Service

FX reaction

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