Economics
RBNZ Has Little Appetite for Lower OCR as Stimulus Calls Mount
- Retail banks are not being prepared for a negative cash rate
- Chief economist Yuong Ha responds to questions from Bloomberg
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New Zealand’s central bank is not currently preparing retail banks for the introduction of a negative official cash rate, suggesting policy makers will resist cutting it further for the time being.
The main reason the Reserve Bank committed to keeping its benchmark rate at 0.25% for at least a year “was to take away the imminent distraction of needing banks to prepare their systems for a negative OCR,” Chief Economist Yuong Ha said in written responses to questions from Bloomberg News. “That situation will change over time,” but the RBNZ was not working with banks on the issue at the moment, he said.