Analysis: RBNZ Likely to Launch Funding Program But Some Rate Cut Still Possible
The Reserve Bank of New Zealand is likely to keep the official cash rate unchanged at 0.25% and launch funding program for banks to provide stimulus to the economy ahead of rate cut next year. However, some form of interest rate cut cannot be discounted so long as it doesn’t compromise on the RBNZ’s forward guidance. This could include a cut in the interest rate on excess balances in the Exchange Settlement Account System (ESAS) to 10bps from the current 25bps.