NZ Finance Minister: RBNZ can do more QE, different instruments
|New Zealand's Finance Minister, Grant Robertson, has said that the Reserve Bank of New Zealand can do more QE with different instruments.
Key comments
- RBNZ Governor Orr is independent to conduct QE.
- RBNZ have a NZ$30b program but can do more.
- RBNZ bought NZ government bonds, but can buy other instruments if needed.
FX implications
Not much change over the past 24 hours for the bird and QE implemented yeterday has seen the entire term structure of the NZGB yield curve lower and flatter, taking away any carry (which was receding as a driver anyway), as noted by analysts at ANZBank. "Lockdown will be brutal on the service economy on top of the tourism hit. But FX is a relative game; every other country is in the same boat, that will limit the downside to an extent. We still see NZD biased lower."
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