By Praveen Menon
WELLINGTON, Aug 13 – New Zealand’s central bank will consider more monetary stimulus if there are periods of resurgence in local coronavirus infections and renewed lockdowns in the country, a top official said on Thursday.
Reserve Bank of New Zealand (RBNZ) Deputy Governor Geoff Bascand told Reuters the resurgence of the COVID-19 pandemic posed a big risk to its outlook as its baseline scenario has an assumption that the virus is contained in the country.
“This is a major risk to our outlook,” Bascand told Reuters in an interview.
New Zealand this week locked down its biggest city, Auckland, and reimposed social distancing rules across the rest of the country as new coronavirus cases were reported, ending a 102-day virus-free run.
“If we get periods of resurgence and have longer lockdown periods then the unfortunate consequence of that is we will see downside risks to our outloook…things will be worse. We would have to consider doing more in terms of our monetary stimulus,” Bascand said.
RBNZ expanded its quantitative easing programme on Wednesday and warned that policy rates might have to go below zero.
(Reporting by Praveen Menon; Editing by Sam Holmes)