RBNZ Details Planned Unwind Of QE Programme

The Reserve Bank of New Zealand outlines the operational details of planned sales of government bonds acquired under the Large Scale Asset Purchase (LSAP) Programme:

• The reduction of the Reserve Bank's bond holdings "will be done through both bond maturities and managed sales of New Zealand Government Securities to New Zealand Debt Management (NZDM)."
• "The Reserve Bank intends to commence sales in July 2022 at a rate of $5 billion per fiscal year (June year) and will sell bonds in order of maturity date, beginning with the longest maturity. Shorter-maturity bonds will mature without reinvestment or sales."
• "Sales are expected to continue in this gradual and predictable manner, subject to market conditions, until LSAP bond holdings have reduced to zero (expected to be in mid-2027)."
• "The MPC reserves the right to change the rate of sales or halt sales should conditions change, but do not expect such changes to be common."
• The the full Financial Markets Statement on the reduction of QE bond holdings is available on the RBNZ's website. Click here to read it.
• NZGBs went offered as the Reserve Bank said it will commence sales of its bond holdings, with 10-Year NZGB yield running to a new 7-year high as a result.