Reserve Bank of New Zealand

Wednesday, 13 May 2020

Inflation-linked bonds on the menu as RBNZ’s appetite grows

Reserve Bank of New Zealand governor, Adrian Orr, says inflation-linked bonds were chosen for inclusion in an expanded large-scale asset purchase (LSAP) programme to align with its principles for use of unconventional monetary policy. The reserve bank also hosed down talk of imminent deployment of negative interest rates but said banks should be ready for such a move by the end of this year.

Wednesday, 13 May 2020

RBNZ expands LSAP programme to NZ$60 billion

On 13 May, the Reserve Bank of New Zealand (RBNZ) expanded the large scale asset purchase (LSAP) programme to NZ$60 billion (US$36.3 billion) over the next 12 months from the previous NZ$33 billion limit. “The expansion to the LSAP programme aims to continue to reduce the cost of borrowing quickly and sharply,” the Monetary Policy Committee (MPC)’s statement explains.

Tuesday, 07 April 2020

Fitch downgrades Australia’s big-four banks to single-A

Fitch Ratings (Fitch) downgraded the long-term issuer default ratings of the Australian major banks and their New Zealand subsidiaries on 7 April, to A+ from AA-, and kept all four on negative outlook. The decision reflects the expected effect on core markets and bank operations of measures being implemented by governments to limit the spread of COVID-19.

Tuesday, 07 April 2020

RBNZ expands LSAP to include semi-government bonds

The Reserve Bank of New Zealand (RBNZ) now says it will expand its large-scale asset purchase (LSAP) programme to include NZ$3 billion (US$1.8 billion) of New Zealand Local Government Funding Agency (LGFA) debt. The 7 March announcement comes just a day after the reserve bank said it would make “small scale” purchases of LGFA bonds alongside rather than as part of the LSAP.

Monday, 06 April 2020

RBNZ to purchase LGFA bonds as complement to LSAP

The Reserve Bank of New Zealand (RBNZ) will begin purchasing New Zealand Local Government Funding Agency (LGFA) bonds. In a 6 April announcement, the RBNZ says the purchases “will be in small scale for liquidity management purposes and to support market functioning”.

Wednesday, 01 April 2020

RBNZ adds long-term bank funding and restricts capital redemptions

The Reserve Bank of New Zealand (RBNZ) has added a term-lending facility (TLF) for banks to its suite of COVID-19 relief measures. It has also restricted banks from redeeming capital instruments that are not common-equity tier-one (CET1).

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