VIEW: Westpac note that "the RBNZ said that....>

RBNZ: VIEW: Westpac note that "the RBNZ said that the most effective measure

would be further fiscal stimulus. But it also talked about its own options for

further stimulus if required, which included "further reductions in the OCR; a

term lending facility; and adding other asset classes, such as foreign assets,

to the LSAP programme." The RBNZ clearly left the door open to a negative OCR in

the future. It reiterated that a negative OCR cannot currently be implemented

due to operational issues at trading banks, and therefore "reaffirmed its

forward guidance that the OCR will remain at 0.25 percent until early 2021." The

most significant point here is that the RBNZ gave forward guidance that the OCR

would remain at 0.25%, not a commitment. Forward guidance is regularly updated

in response to changing circumstances, so we feel comfortable maintaining our

forecast that the OCR will drop to -0.5% in November."