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Bank of New Zealand leaves interest rate unchanged at 0.25%, The Fed chairman believes that the COVID-19 has the biggest economic impact in history

Bank of New Zealand leaves interest rate unchanged at 0.25%

The Bank of New Zealand announced after the interest rate meeting this morning that it would keep interest rates unchanged at 0.25%. At the same time, the scale of the plan to purchase government bonds was greatly expanded from the original 30 billion to 60 billion New Zealand dollars, all in line with market expectations. The central bank statement stated that it was preparing to adopt other monetary policies, including further interest rate cuts when necessary, and emphasized that by maintaining low interest rates for the foreseeable future, monetary policy will continue to provide significant support to the local economy. As for the negative interest rate policy that the market is more concerned about, the central bank reiterated that it will become one of the policy options in the future, and maintain the forward guidance of maintaining interest rates at 0.25% before the beginning of 2021, which means that the central bank has no chance to lower interest rates again during the year.

 

The Fed chairman believes that the COVID-19 has the biggest economic impact in history

Federal Reserve Chairman Powell said that the impact of the COVID-19 epidemic on the economy seems to be the largest in history, and the scope and speed of the economic recession are unprecedented, causing long-term concerns. It is estimated that households with an annual income of less than US $ 40,000 will lose their jobs, and the unemployment rate is expected to peak next month. In addition, it stated that the Fed is taking action at an unprecedented speed and intensity, and the policy also provides a certain degree of relief and stability to the economy, but additional measures may be required to avoid long-term damage to the economy from the epidemic. Various tools until the crisis passed and economic recovery proceeded smoothly. As for the unchanged view on negative interest rates, it stated that this was not a matter for consideration by the policy-making committee, and that the previous minutes of the discussion on negative interest rates showed that all members opposed the negative interest rate policy.

 




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