Don’t worry, there’s still more “in the tin”

The 50 basis point cut by the RBNZ took markets by surprise this week and we now expect the Bank to cut rates to 0.75% by early next year. If the economic outlook deteriorates by considerably more than we currently expect the RBNZ may have to turn to unconventional monetary policy. In New Zealand we suspect negative interest rates would be favoured over quantitative easing.

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