The Reserve Bank of New Zealand (RBNZ) has released the minutes of its August monetary policy decision, in which the central bank kept OCR unchanged amid a new lockdown due to covid in the country.
Key comments
In light of the current level 4 lockdown and health uncertainty, the committee agreed to leave the OCR unchanged at this meeting.
The Committee agreed that its policy stance is to further reduce monetary policy stimuli.
The Committee reviewed the merits of an increase in OCR at this meeting and discussed the implications of OCR changes over time.
Board members were now more confident that rising capacity pressures will be fueled by inflation, and that employment is at its maximum sustainable level.
Board members concluded that they could continue to remove the monetary stimulus, following their decision to stop additional purchases of government bonds under the LSAP program at their July meeting.
The Committee reiterated that the OCR is currently the preferred instrument to adjust the level of stimulus in the economy.
The Committee noted that a number of factors are expected to weigh on house prices in the medium term.
Board members expressed their uncertainty about how quickly momentum in the housing market will recede.
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