The NZIER notes that "there remains a wide.....>

RBNZ: The NZIER notes that "there remains a wide range of views amongst the

Shadow Board on whether more monetary policy stimulus is required, and in what

form. Overall, the consensus amongst the Shadow Board is that more stimulus

would be required over the next twelve months, with the majority favouring an

expansion of the Reserve Bank's quantitative easing programme. There was little

support amongst the Shadow Board for the OCR going into negative territory at

the upcoming meeting, although some members thought such a move would be

required over the coming year. Members noted a negative OCR was unlikely to be

effective in stimulating the economy, while highlighting the risks which include

encouraging people to save more in order to achieve their savings goals (thus

reducing spending) and reducing business confidence. When it comes to the

quantitative easing programme, most Shadow Board members felt an expansion of

the programme was appropriate. Some members also advocated the Reserve Bank

expand bond purchases to include council and Housing NZ debt. Increasing its

asset purchase programme was generally seen as a more effective way for the

Reserve Bank to support the Government in stimulating the economy."