Post by EZWarren on Mar 23, 2020 10:55:09 GMT 10
The Reserve Bank of New Zealand has announced a bumper bonds buyback program.
New Zealand has begun quantitative easing in an effort to provide stimulus in its coronavirus-struck economy.
On Monday morning, the Reserve Bank (RBNZ) announced it would begin a $NZ30 billion ($A29.5 billion) government bonds buying program.
"The program aims to provide further support to the economy, build confidence, and keep interest rates on government bonds low," a RBNZ statement read.
The action comes after the reduction of New Zealand's official cash rate to just 0.25 per cent, the lowest in its history, and has full government support.
Finance Minister Grant Robertson signed a memorandum of understanding and letter of indemnity with the Reserve Bank to green-light the bonds buying.
"This is part of our strategy to mobilise all arms of New Zealand's economic infrastructure in our fight against the COVID-19 virus," Mr Robertson said.
"We are all uniting together - the Government, the Reserve Bank, private businesses and the retail banks - to cushion the impact on New Zealand from this global pandemic."
On Monday, New Zealand shares continued their downward tumble, with the NZX 50 Index dropping 8.4 per cent in the opening three hours of trading.
Last week, Mr Robertson unveiled a $NZ12.1 billion ($A11.9 billion) economic stimulus package inclduing wage guarantees and concessions for business aimed at securing jobs.
That package, worth around 4 per cent of New Zealand's annual GDP, is increasingly looking like a drop in the ocean.
Since then, Australia and the United Kingdom have announced bumper spending packages worth more in equivalent terms.
Industry group Business NZ has called on the government to come forward with a secondary package as soon as Monday.
New Zealand has begun quantitative easing in an effort to provide stimulus in its coronavirus-struck economy.
On Monday morning, the Reserve Bank (RBNZ) announced it would begin a $NZ30 billion ($A29.5 billion) government bonds buying program.
"The program aims to provide further support to the economy, build confidence, and keep interest rates on government bonds low," a RBNZ statement read.
The action comes after the reduction of New Zealand's official cash rate to just 0.25 per cent, the lowest in its history, and has full government support.
Finance Minister Grant Robertson signed a memorandum of understanding and letter of indemnity with the Reserve Bank to green-light the bonds buying.
"This is part of our strategy to mobilise all arms of New Zealand's economic infrastructure in our fight against the COVID-19 virus," Mr Robertson said.
"We are all uniting together - the Government, the Reserve Bank, private businesses and the retail banks - to cushion the impact on New Zealand from this global pandemic."
On Monday, New Zealand shares continued their downward tumble, with the NZX 50 Index dropping 8.4 per cent in the opening three hours of trading.
Last week, Mr Robertson unveiled a $NZ12.1 billion ($A11.9 billion) economic stimulus package inclduing wage guarantees and concessions for business aimed at securing jobs.
That package, worth around 4 per cent of New Zealand's annual GDP, is increasingly looking like a drop in the ocean.
Since then, Australia and the United Kingdom have announced bumper spending packages worth more in equivalent terms.
Industry group Business NZ has called on the government to come forward with a secondary package as soon as Monday.
