BBG reports that according to NZ Treasury,.....>

RBNZ: BBG reports that according to NZ Treasury, the RBNZ could cut the OCR to

-0.35% in the event of a crisis. The source of the information is a paper

produced by the Treasury Department and obtained by BBG under the Official

Information Act.

- "Assuming the spread between the OCR and other rates remains constant, this

suggests the limit of the OCR, before corporate bond rates reach zero, is

between -0.2% and -0.35%. This would still imply most market participants facing

positive rates."

- Worth stressing that the paper specifies the lowest boundary to which the RBNZ

could bring its OCR if market rates were to remain positive, ensuring the

effectiveness of monetary policy. It does not recommend or predict the OCR

entering negative territory.

- The paper carries a proviso that "it is not gov't policy or Tsy advice" and

doesn't suggest "a downturn is imminent, or that risks of one have increased."

- Markets initially read the paper as a dovish signal. NZD/USD dropped ~25 pips

on the headlines, before it pared most of earlier losses.