RBNZ announce a 30B bond buying program yesterday
The RBNZ Orr is speaking on radio New Zealand and says
- Aim of our QE program is to keep rates very low
- This is a very standard operation globally
- We are in a great position to be doing this him
- Could think about buying additional assets
The RBNZ announced yesterday that they would be buying 30 billion of government bonds as a result of “negative economic implications of the coronavirus outbreak have continued to intensify”
The Monetary policy committee said that “further monetary stimulus is needed to meet its inflation and employment objectives” and they saw the need to launch this bond buying programme because financial conditions tightened “unnecessarily” over the past week.
The RBNZ cut its Official Cash Rate (OCR) cut from 1% to 0.25% last Monday. However, the cut wasn’t as effective as it should’ve been in passing through lower interest rates to borrowers.