VIEW: ANZ note that "the Reserve Bank has a....>

RBNZ: VIEW: ANZ note that "the Reserve Bank has a big job on its hands. The

tools it has employed so far are working well but require a bit more ammunition.

The Minister of Finance would not have hesitated before signing off on the

larger QE budget that will smooth the path of raising the funds to pay for the

enormous fiscal stimulus that will be required over the next year or two.

Although COVID-19 is firmly on the retreat in New Zealand, it is wreaking

economic devastation abroad. And the balance sheet damage done in the last

couple of months in New Zealand is huge. It's going to be a long slog out, and

both fiscal and monetary policy will need to do their bit to help the economy

recover. A ramping up of both the size and breadth of the QE program is

certainly possible, with purchases of foreign assets to dampen the exchange rate

potentially on the cards. And next year, when the financial system is

technically ready, we can't rule out the possibility of negative interest rates,

though we are highly dubious that they would be effective in stimulating

economic activity. In the meantime, even the possibility will help keep interest

rates low, and that all helps."