In the latest statement released by the Reserve Bank of New Zealand (RBNZ) on Tuesday, the central bank will extend its asset purchasing program (QE) to a total of NZD 33bn now.
Key points from the statement
“The Reserve Bank of New Zealand has added $3 billion of Local Government Funding Agency (LGFA) debt to its Large-Scale Asset Purchase programme (LSAP). This represents approximately 30 percent of the total LGFA debt on issue, and takes the total size of the LSAP to $33 billion over 12 months.
The Reserve Bank’s Monetary Policy Committee (MPC) noted that purchases of New Zealand Government Bonds to date have successfully reduced longer-term interest rates. However, the negative economic effects of the COVID-19 outbreak continue to evolve.
The Committee agreed it was important that monetary policy operated as effectively as possible.”
NZD/USD off highs but still well bid
The Kiwi is off the 0.5965 highs but remains strongly bid around 0.5955 region following the release of the above statement. Broad-based US dollar retreat and the oil-price rebound underpins the spot amid a risk-on market profile.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.