As expected the Reserve Bank of New Zealand (RBNZ) kept interest rates unchanged at 0.25% at its meeting this morning but has taken additional stimulus measures by expanding the asset purchase program from $33 billion to $60 billion. The main points of interest in the statement accompanying the decision were as follows:
Willing to provide fixed-term loans if necessary.
The bank expects there will be more rate cuts.
Willing to provide long-term fixed loans if necessary.
The asset purchase program aims to reduce borrowing costs rapidly and sharply.
Willing to purchase other types of assets within the cash facilitation program.
Annual inflation is likely to decline 0.4% in the first quarter of 2021.
Willing to take all necessary measures, if necessary.
The risks facing the economy are still on the downside.
The bank will keep interest at low levels for an extended period.
