Reserve Bank of New Zealand leaves cash rate at 1%

RBNZ forecasts for the OCR show they do not expect to cut this year at all

Sees official cash rate at 1.01% in June 2020 (previous 0.9%)

Sees official cash rate at 1.03% in March 2021 (previous 0.9%)

Sees official cash rate at 1.1% in June 2021 (previous 0.94%)

Overall impact of coronavirus on New Zealand will be of a short duration

Risks that impact will be larger and more persistent

Low rates necessary to keep employment and inflation around target

economic growth expected to accelerate over second half of 2020

Employment is at or slightly above its max sustainable level

Inflation close to 2% mid point

Committee agreed low interest rates had helped to get employment and inflation to around their target levels

Committee discussed financial stability risks from ongoing low rates

Members noted the bank's assessment that marginal changes to the ocr would not materially affect these risks at this time

Members discussed the better mix of policy stimulus in the projections, given additional fiscal stimulus is reducing the burden on monetary policy

Committee discussed alternative cash rate settings and the various trade-offs involved