Clever 3-in-1 Communication From the RBNZ

By Sophia Rodrigues

The Reserve Bank of New Zealand issued an advisory this morning about an upcoming speech by Governor Adrian Orr on unconventional monetary policy. But in a very clever move, it turned the advisory into a statement aimed to comfort markets while also hinting it doesn’t plan on making any official cash rate decision before the scheduled March 25 meeting.

Orr will release the speech on March 10 at 1400 hours New Zealand time along with principles around how it would assess and use unconventional monetary policy tools if ever needed.

In order to prevent market speculation about any comment on OCR in the speech or the possibility of an OCR cut ahead of scheduled March 25 meeting, the RBNZ made it clear that the principles and speech will not discuss current economic conditions or its outlook for the OCR.

The RBNZ went a step further, issuing a statement to comfort markets without making any reference to coronavirus.

“The Bank remains prepared in its business continuity role to ensure a well-functioning financial system, including ongoing consumer and business access to credit and cash, liquidity to the banking system and a stable payments and settlements system,” the RBNZ said.