Breaking: RBNZ keeps QE, OCR unchanged

The Reserve Bank of New Zealand and MPS was not expected to announce any further changes today and instead acknowledge that there is now less need for monetary stimulus than it thought at its November review.

RBNZ key takeaways

OCR Unchanged.

• RESERVE BANK OF NEW ZEALAND SAYS PROLONGED MONETARY STIMULUS NECESSARY
• 23-Feb-2021 19:00:20 - RBNZ SAYS LARGE SCALE ASSET PURCHASE PROGRAMME MAINTAINS AT NZ$100 BLN
• 23-Feb-2021 19:00:30 - RBNZ SAYS FUNDING FOR LENDING PROGRAMME UNCHANGED
• More to come...

How did the NZD react?

The kiwi has been bid in the build-up to the event given that the Gross Dometic Product, inflation, employment, commodity and houses prices have all been a lot former than forecast last time around by the central bank.  

On the event, the NZD/USD has dropped to test hourly support.

However, at the prior meeting back in November, the price rallied over 90 pips after an initial drop in the first hour of trade post the announcements:

With that being said, the upside is also limited considering that RBNZ has noted that the accommodation shall remain in place for some time.

About the RBNZ interest rate decision and rate statement

The 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 raises the interest rates it is positive, or bullish, for the NZD. The RBNZ rate statement contains the explanations of their decision on interest rates and commentary about the economic conditions that influenced their decision.