Ex-RBNZ Chief Economist – NZ Doesn’t Need As Much QE As Thought Previously

The former Reserve Bank of New Zealand (RBNZ) Chief Economist, Sharon Zollner, was interviewed by MNI and stated that New Zealand does not need as much fiscal or monetary support as was previously thought. 

 

She mentioned that lower-than-expected government borrowing and New Zealand’s economic recovery means that the RBNZ is not likely to reach the NZD100 billion cap that was set for its bond-buying program by the target of June 2022. As the NZ government issues few bonds and the current state of economic recovery, the QE program is fading into the background. ‘

 

Zollner also mentioned that the RBNZ has the luxury of waiting before they make their next call, as she commented on the banks’ decision this week. Although economic data for New Zealand was mixed, 2021 won’t be a deflationary year but it will be a hurdle to raise or cut rates.