VIEW: ASB note that "the RBNZ did not rule.....>

RBNZ: VIEW: ASB note that "the RBNZ did not rule out a negative OCR but has

pledged to hold the OCR at 0.25% until early '21, largely on the basis of fin'l

institutions not being operationally ready. If they stick to this timetable the

additional stimulus may come too late. However, work behind the scenes is likely

advancing & the preparations of fin'l institutions in operating in a -ve OCR

regime have stepped up. We are not yet convinced that a -ve OCR would support

the economy via lowering borrowing interest rates. It might actually be harmful

for credit creation, which is the lifeblood of a healthy economy. This is not to

say that a -ve OCR would not be a useful option in future. All policy options

look to be on the table. The RBNZ have a number of tools in the kitbag which

they have already relaxed, including dropping the LVR restrictions on mortgage

borrowing and relaxing the core funding ratio to 50% of bank funding from 75%.

The RBNZ could look at direct intervention into the interest rate swaps market

(to lower wholesale interest rates) or purchasing mortgage-backed securities. We

are not convinced as to the effectiveness of these approaches, but are open to

persuasion."