New Zealand central bank says stimulus still needed amid pandemic uncertainties

[WELLINGTON] The Reserve Bank of New Zealand (RBNZ) would prefer to have monetary stimulus in place for a longer period of time than take it away too quickly, a senior official said on Monday.

New Zealand's central bank held interest rates last week, but hinted at a hike as early as September next year, becoming one of the first advanced economies to signal a move away from the stimulatory settings adopted during the Covid-19 pandemic.

RBNZ Assistant Governor Christian Hawkesby said the implications of Covid-19 were not yet over so a similar amount of monetary stimulus was still needed as was required back in February.

"Our messages around having stimulus in place for a considerable period of time, being patient and our least regret is keeping stimulus in place for too long rather than taking it away too quickly, all of those messages stay in place," Mr Hawkesby said in an interview.

Mr Hawkesby said the official cash rate (OCR) projections RBNZ released last week were conditional on a number of underlying assumptions that need to fall in place to allow the bank to remove some stimulus at the back end of next year.

REUTERS

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