New Zealand Ramps Up Stimulus To Combat Covid-19 Impact

The New Zealand government on Monday announced further support for the economy as the country prepares for the Alert Level 4 in the fight against covid-19.

The central bank has decided to implement NZ$30 billion asset purchase programme as the negative economic implications of the coronavirus outbreak continued to intensify.

The cabinet agreed to remove the cap on the wage subsidy scheme, which will inject a further NZ$4 billion into the economy over the next eleven weeks.

The changes mean the forecast cost of the wage subsidy scheme is being lifted to NZ$9.3 billion Finance Minister Grant Robertson, said. This assumes 50 percent of businesses access the scheme.

The government, central bank and retail banks have agreed in principle to significant temporary support for mortgage holders and a business finance guarantee scheme for those impacted by COVID-19.

The cabinet agreed to freeze all rent increases and to look to extend no-cause terminations to protect people during this difficult time.

“Like the rest of the world, we are facing the potential for devastating impacts from this virus,” Prime Minister Jacinda Ardern, said. “But, through decisive action, and through working together, we have a small window to get ahead of it.”

The monetary policy committee of the Reserve Bank of New Zealand decided to implement a Large Scale Asset Purchase programme (LSAP) of government bonds.

The central bank will buy up to NZ$30 billion of government bonds in the secondary market over the next twelve months.

The bank said it will monitor the effectiveness of the programme and make adjustments and additions if needed.

Last week, the central bank had cut its interest rate by 75 basis points to 0.25 percent.

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RBA Cuts Rate Further, Launches Asset Purchases To Ease Covid-19 Impact

Reserve Bank of Australia decided to cut its key interest rates further to a record low and launched a money printing scheme as the spread of coronavirus, or Covid-19, disrupts economic activity and financial markets.

At an emergency meeting on Thursday, the Reserve Bank Board governed by Philip Lowe, decided to reduce the cash rate by 25 basis points to 0.25 percent from 0.50 percent. This was the second reduction this same month.

On March 2, the rate was lowered by 25 basis points.

In the forward guidance, Lowe said the rate will not be increased until progress is being made towards full employment and the bank is confident that inflation will be sustainably within the 2-3 per cent target band.

The RBA Governor said the cash rate will remain at its current level for some years, but not forever.

The bank will purchase government bonds in the secondary market targeting the yield on 3-year bonds at around 0.25 percent. The operation to be commenced on Friday is set to address market dislocations.

In order to support credit supply to small and medium-sized businesses, the RBA will provide a three-year funding facility to authorized deposit-taking institutions at a fixed rate of 0.25 percent. The planned size of this facility is at least A$90 billion.

Further, exchange settlement balances at the central bank will be remunerated at 10 basis points, rather than zero.

The bank will also continue its one-month and three-month repo operations in its daily market operations until further notice. In addition, the RBA will conduct longer-term repo operations of six-month maturity or longer at least weekly, as long as market conditions warrant.

In addition to the monetary policy easing, the government on Thursday announced A$15 billion funds to support small and medium-sized businesses.

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New Zealand Ramps Up Stimulus To Combat Covid-19 Impact

The New Zealand government on Monday announced further support for the economy as the country prepares for the Alert Level 4 in the fight against covid-19.

The central bank has decided to implement NZ$30 billion asset purchase programme as the negative economic implications of the coronavirus outbreak continued to intensify.

The cabinet agreed to remove the cap on the wage subsidy scheme, which will inject a further NZ$4 billion into the economy over the next eleven weeks.

The changes mean the forecast cost of the wage subsidy scheme is being lifted to NZ$9.3 billion Finance Minister Grant Robertson, said. This assumes 50 percent of businesses access the scheme.

The government, central bank and retail banks have agreed in principle to significant temporary support for mortgage holders and a business finance guarantee scheme for those impacted by COVID-19.

The cabinet agreed to freeze all rent increases and to look to extend no-cause terminations to protect people during this difficult time.

“Like the rest of the world, we are facing the potential for devastating impacts from this virus,” Prime Minister Jacinda Ardern, said. “But, through decisive action, and through working together, we have a small window to get ahead of it.”

The monetary policy committee of the Reserve Bank of New Zealand decided to implement a Large Scale Asset Purchase programme (LSAP) of government bonds.

The central bank will buy up to NZ$30 billion of government bonds in the secondary market over the next twelve months.

The bank said it will monitor the effectiveness of the programme and make adjustments and additions if needed.

Last week, the central bank had cut its interest rate by 75 basis points to 0.25 percent.

Source: Read Full Article

New Zealand Ramps Up Stimulus To Combat Covid-19 Impact

The New Zealand government on Monday announced further support for the economy as the country prepares for the Alert Level 4 in the fight against covid-19.

The central bank has decided to implement NZ$30 billion asset purchase programme as the negative economic implications of the coronavirus outbreak continued to intensify.

The cabinet agreed to remove the cap on the wage subsidy scheme, which will inject a further NZ$4 billion into the economy over the next eleven weeks.

The changes mean the forecast cost of the wage subsidy scheme is being lifted to NZ$9.3 billion Finance Minister Grant Robertson, said. This assumes 50 percent of businesses access the scheme.

The government, central bank and retail banks have agreed in principle to significant temporary support for mortgage holders and a business finance guarantee scheme for those impacted by COVID-19.

The cabinet agreed to freeze all rent increases and to look to extend no-cause terminations to protect people during this difficult time.

“Like the rest of the world, we are facing the potential for devastating impacts from this virus,” Prime Minister Jacinda Ardern, said. “But, through decisive action, and through working together, we have a small window to get ahead of it.”

The monetary policy committee of the Reserve Bank of New Zealand decided to implement a Large Scale Asset Purchase programme (LSAP) of government bonds.

The central bank will buy up to NZ$30 billion of government bonds in the secondary market over the next twelve months.

The bank said it will monitor the effectiveness of the programme and make adjustments and additions if needed.

Last week, the central bank had cut its interest rate by 75 basis points to 0.25 percent.

Source: Read Full Article