RBNZ: Cash rate on hold and QE upsized – TDS

The Reserve Bank of New Zealand (RBNZ) left the cash rate on hold at 0.25% as was widely expected and lifted the size of its QE program from NZ$33b to NZ$60b, per TD Securities.

Key quotes

“On the OCR, the Bank reaffirmed its forward guidance on the cash rate, indicating that the OCR will remain at 0.25% until early 2021 in its ‘Summary record of meeting’.”

“As for the LSAP, this was upsized from NZ$33b to NZ$60b. The market was expecting an increase and so did we. Inflation Linked Bonds were included in the QE program.” 

“Rate cuts to zero or below are not in the Bank's forecasts, but the Bank has not ruled out a move into negative territory.”

“The RBNZ has flagged tools such as adding other assets to its QE program and fixed term loans to banks.”