Light On Details

Ultimately, the Bank failed to commit to negative interest rates, although it wasn't expected to engage in such pre-commitment, and noted that "progress has been made on the Bank's operational ability to deploy an FLP and a negative OCR. The Committee agreed that these instruments can be mutually supportive in bolstering economic activity if necessary."

• The outline of the FLP scheme was light on details re: the ultimate NZ$ size that the Bank aims to provide through the facility, although it did stress that "the programme should be of sufficient size to allow financial institutions to reduce interest rates with confidence that a low cost, stable funding source was available."
• While the Bank noted that the impact of COVID on New Zealand's economy had not been as sharp as expected, it continued to flag downside risks to its view, as well as flagging time lags re: the broader roll out of any COVID-19 vaccine.
• The Bank's economic projections had little in the way of meaningful impact on markets, with focus moving to Governor Orr's press conference scheduled for the top of the hour, where questions surrounding the potential for future easing will likely dominate.