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Forex News

RBNZ to extend QE to NZD 33bn now, Kiwi stays above 0.5950

In the latest statement released by the Reserve Bank of New Zealand (RBNZ) on Tuesday, the central bank will extend its asset purchasing program (QE) to a total of NZD 33bn now.

Key points from the statement

“The Reserve Bank of New Zealand has added $3 billion of Local Government Funding Agency (LGFA) debt to its Large-Scale Asset Purchase programme (LSAP). This represents approximately 30 percent of the total LGFA debt on issue, and takes the total size of the LSAP to $33 billion over 12 months.

The Reserve Bank’s Monetary Policy Committee (MPC) noted that purchases of New Zealand Government Bonds to date have successfully reduced longer-term interest rates. However, the negative economic effects of the COVID-19 outbreak continue to evolve.

The Committee agreed it was important that monetary policy operated as effectively as possible.”

NZD/USD off highs but still well bid

The Kiwi is off the 0.5965 highs but remains strongly bid around 0.5955 region following the release of the above statement. Broad-based US dollar retreat and the oil-price rebound underpins the spot amid a risk-on market profile.

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