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New Zealand central bank expands stimulus, holds rate

Christian Fernsby |
The Reserve Bank of New Zealand expanded its monetary stimulus and retained its interest rate as the economic shock caused by the pandemic is set to remain for a prolonged period.

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Topics: NEW ZEALAND   

The Monetary Policy Committee decided to begin a Funding for Lending Programme in December in order to reduce banks' funding costs and lower interest rates.

The committee also decided to continue with the asset purchase programme up to NZ$100 billion and to maintain the official cash rate at 0.25 percent.

Policymakers observed that the banking system is on track to be operationally ready for negative interest rates by year end. The committee agreed that it was prepared to lower the interest to provide additional stimulus if required.

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