Reserve Bank of New Zealand under no pressure to act as Delta outbreak not 'game changer' yet- RBNZ economist

Reuters reports that a senior RBNZ official said that the fresh outbreak of the coronavirus in New Zealand is not a "game changer" yet and there is no pressure to act on monetary policy.

"At this stage we don't see it as a game-changer in the sense that our underlying economic analysis and views should be thrown out of the window and we should start again," the Reserve Bank of New Zealand's (RBNZ) Chief Economist Yuong Ha said.

However, Ha said the outbreak of the highly transmissible Delta variant in New Zealand has raised some economic uncertainty.

"Of course Delta, given how contagious and transmissible it is, may cast some amount of uncertainty, but .... our assessment that monetary policy stimulus should be removed at some point still sits behind our thinking at this stage," he said.

The Delta-driven outbreak has now widened to 107 cases from just a handful a week ago. New Zealand Prime Minister Jacinda Ardern announced a three-day extension the nationwide lockdown to midnight on Friday.

Employment numbers have surprised on the upside recently and are even stronger than pre-COVID levels, and labour shortages are also getting worse.

When asked if pressure was growing on RBNZ to act on policy, Ha said: "I don't think so. I think we are in a really good position in terms of optionality."