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Wednesday, 13 May 2020

Get ready for negative rates

Negative rates mooted

New Zealand is leading the way yet again.

This time it's the Reserve Bank that gets it.

Go hard, early, and commit to doing 'whatever it takes'...

Source: RBNZ

The RBNZ will expand the scale of its asset purchase program and aims to reduce the cost of borrowing quickly.

The RBNZ will also liaise with financial institutions ahead of a possible move to a negative cash rate by next year. 

A big move in the currency followed as markets absorbed this redoubled commitment to unconventional measures. 

Things to tend to happen slower this side of the Tasman, but it wouldn't be a surprise to see the Reserve Bank of Australia cutting by another 15 basis points over the coming months.