Breaking: RBNZ leaves OCR steady at 0.25%, expands QE to NZD100 billion

The Reserve Bank of New Zealand (RBNZ) board members decided to leave the Official Cash Rate (OCR) unchanged at a record low of 0.25% for the third straight month in August, as much anticipated.

The RBNZ expanded its quantitative easing (QE) programme size to NZD100 billion.

Additional takeaways

QE eligible assets remain same.

Agreed that package of additional monetary instruments must remain in active preparation.

Package includes a negative OCR.

Purchase of foreign assets remain an option.

Output and employment have recovered sooner than projected.

Any significant change in the global and domestic economic outlook remains dependent on the containment of the virus.

About RBNZ Interest Rate Decision

RBNZ Interest Rate Decision is announced by the Reserve Bank of New Zealand. If the RBNZ is hawkish about the inflationary outlook of the economy and rises the interest rates it is positive, or bullish, for the NZD.

NZD/USD reaction 

On a dovish RBNZ decision, the NZD/USD pair lost 40-pips and dropped to a multi-week low of 0.6528 before reversing to now trade at 0.6544, still down 0.4% on the day.