RBNZ Minutes: Possible negative outcomes from global pandemic remain severe

The Reserve Bank of New Zealand’s (RBNZ) monetary policy decision was accompanied by the minutes of the meeting, which showed that board members believed the possible negative outcomes from the global pandemic remain severe and larger than any near-term upside surprises.

Additional points

Members discussed the pros and cons of expanding the LSAP programme now.

Any expansion would need to be driven by the economic outlook and assessment of the effectiveness of the programme.

A change in the size of the programme would also need to be of sufficient magnitude to make a meaningful difference.

Staff are working towards ensuring a broader range of monetary policy tools would be deployable in coming months.

Tools include a term lending facility, reductions in the OCR, and foreign asset purchases, as well as reassessing the appropriate quantum of the current LSAP.

Committee agreed that it is not yet clear whether the monetary stimulus delivered to date is sufficient to meet its mandate.