NZ Central Bank says Keeping Stimulus Longer Better than Taking Away too Soon


WELLINGTON, May 31 Reuters The Reserve Bank of New Zealand RBNZ would prefer to have monetary stimulus in place for a longer period of time than take it away too quickly, a senior official said on Monday.

RBNZ Assistant Governor Christian Hawkesby said the implications of the COVID19 pandemic were not yet over so the amount of monetary stimulus needed was little changed from February.

Our messages around having stimulus in place for a considerable period of time, being patient and our least regret is keeping stimulus in place for too long rather than taking it away too quickly, all of those messages stay in place, Hawkesby said in an interview.

New Zealands central bank held interest rates last week but hinted at a hike as early as September next year, becoming one of the first advanced economies to signal a move away from the stimulatory settings adopted during the COVID19 pandemic.

Hawkesby said RBNZ felt it was the right time to reintroduce projections of the official cash rate OCR as the main policy signal for markets to focus on.

The banks positive outlook, driven by a faster than expected domestic recovery from the pandemic and the global vaccine rollout, prompted the New Zealand dollar to strengthen.

Hawkesby said RBNZ was aware there were risks in publishing the OCR track as the markets would tend to get ahead of the banks bias when it came to pricing in tightening.

We also had awareness that it will take some time for markets to remember that these are…


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