RBNZ kept OCR unchanged at 0.25% as widely expected. Also, the central bank decided to expand the upper limit of the Large Scale Asset Purchase program (LSAP) to NZD 60B, up from NZD 33B. Government inflation-indexed bonds are now included in the program, together with government bonds and local government funding agency bonds.
RBNZ is also “prepared to use additional monetary policy tools if and when needed including reducing the OCR further, adding other types of assets to the LSAP programme, and providing fixed term loans to banks.”
In the minutes, the committee noted that a “negative” OCR will “become an option in future”, even though financial institutions are “not yet operationally ready. Discussions with the institutions about preparing for negative rate are “ongoing.
