Last week, the Reserve Bank of New Zealand announced (almost) doubling its quantitative easing program
- From NZ $ 33 billion to $ 60 billion
ANZ expects even more to come, placing expansion in the competition of the The government presented a really huge budget … a lot of funding not yet allocated:
- We are now planning a further extension of QE to the August MPS to a limit of $ 90 billion. This will help absorb the larger than expected government bond issuance program to finance all of these expenses. The RBNZ has received compensation from the government to increase the QE as the outstanding bonds increase, so the barrier has been lowered, but an expansion will still have to be approved by the Monetary Policy Committee. We expect this to happen at the August MPS, if not sooner.
A simpler policy should be equivalent to a weaker currency, all other things being equal (which is never the case, of course).