RBNZ says keeping stimulus longer better than taking away too soon

Reuters reports that RBNZ Assistant Governor Christian Hawkesby said that 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.

Hawkesby said the implications of the COVID-19 pandemic were not yet over so the amount of monetary stimulus needed was little changed from 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," Hawkesby said.

Hawkesby said RBNZ felt it was the right time to re-introduce projections of the official cash rate (OCR) as the main policy signal for markets to focus on.

Hawkesby said RBNZ was aware there were risks in publishing the OCR track as the markets would tend to get ahead of the bank's bias when it came to pricing in tightening.

Hawkesby said that the resurgence of COVID-19 in Australia and other Asian countries were a reminder of the level of uncertainty that still remains.