NZD 2020-06-22 08:45

RBNZ decisions comes into focus this week

Main points

  • RBNZ expected to keep OCR steady at June 24 monetary policy meeting at record low 0.25%
  • gross domestic product (GDP) falling 1.6% in the first quarter of 2020
  • GDP is expected to contract by 17% in the third quarter
  • Any talk about more stimulus would push NZD lower
  • The Central bank to continue to expand the current Large-Scale Asset Purchase (LSAP) program to include “other asset classes, such as foreign assets”, after topping up the program from $33b to $60b.
  • The economy has exited the lockdown much faster than policymakers assumed in their latest forecasts which may ease the pressure on RBNZ to take more easing measure soon.
  • The currency has gained 17% from its March lows