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RBNZ Says Negative Rate Less Likely if Banks Use Cheap Loans

  • Assistant Governor Christian Hawkesby in Bloomberg interview
  • Says negative cash rate remains option if more stimulus needed
Christian Hawkesby
Christian HawkesbyPhotographer: Hagen Hopkins/Getty Images
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New Zealand’s central bank said it’s less likely to impose a negative official cash rate on banks if they use its new program of cheap loans to lower borrowing costs.

“If the banks don’t like having a negative OCR, then passing on as much of the Funding for Lending Program as possible through into lower lending rates is going to reduce the likelihood that a negative OCR is needed,” Assistant Governor Christian Hawkesby told Bloomberg in an interview Thursday in Wellington. “So there is that incentive there for them, because it is about the overall amount of monetary stimulus that’s required.”