RBNZ Pulling Out The Stops: Three bold steps taken, but more may be needed

  • The RBNZ have cut the OCR to its lower operational bound of 0.25% and pledged it will remain at this level for at least the next 12 months. Whether the OCR eventually goes lower than 0.25% depends on the economic outlook, willingness of financial market participants to hold eligible NZD securities and the appetite of retail depositors.
  • The RBNZ and other central banks have put in place a raft of measures to improve monetary policy implementation and to keep the financial system functioning have also been announced to calm jittery markets. These have helped for now, but more will be needed if markets flare up from here.
  • On March 23, the RBNZ kick-started their Quantitative Easing (QE) programme, unveiling a large $30bn Large Scale Asset Purchase Programme of NZ Government bonds over the next 12 months. The package is front-loaded and will provide considerable short-term support to NZ interest rate markets, dampening yields. RBNZ QE could be ramped up further if needed, but we are concerned that a persistent COVID-19 hit to the public finances could see it dwarfed by climbing NZ public debt. We encourage the RBNZ to look at alternative options available.


Contact us

Nick Tuffley

ASB Chief Economist

Since starting out in 1997 as an economist, it's fair to say Nick has seen a few hair-raising moments over the years, including the Asian Financial Crisis and the Global Financial Crisis.

One of Nick's strengths is his ability to communicate complex ideas in a readily understandable and entertaining way.  He thrives on helping people understand the economic environment to help enrich the quality of their business or personal life. He’s proud to lead a team that has won two Forecast Accuracy Awards from Consensus Economics, and has a strong track record with their Official Cash Rate and dairy price forecasts. 

Nick grew up in Christchurch and graduated with a Master of Commerce degree from the University of Canterbury.  He learned his economic ropes at the Reserve Bank of New Zealand before a long stint as a Senior Economist at Westpac, and joined ASB as Chief Economist in 2007.

Mark Smith

Senior Economist

Mark joined ASB in 2017, with over 20 years of public and private sector experience working as an economist in New Zealand and the UK.

His resume includes lengthy stints at ANZ and the Reserve Bank of New Zealand, and he has also worked at the Bank of England, HM Treasury and the New Zealand Transport Agency. Mark's areas of specialisation include interest rate strategy, macro-economic analysis and urban economics.

Born and bred in the Waikato, Mark studied at Waikato University where he graduated with a Master of Social Sciences, majoring in Economics.

Mark's key strengths are the ability to use his extensive experience, inquisitive nature, analytical ability, creativity and pragmatism to dig a little deeper and to deliver common sense solutions to tackle complex problems.

When not at work Mark likes to travel, keep fit and spend time with his friends and family.