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Articles by Reserve Bank of New Zealand News Releases
05 April 2020
Working at the Reserve Bank for the people of New Zealand is a privilege and at a time like now there is no shortage of motivation. We are working both as a skeleton crew at our premises and remotely. Productivity has been high, as is the case across all essential services, and I have personally appreciated and needed the connectivity.
To date our ‘bubble’ has mostly included the Government, Treasury, and New Zealand’s banks, non-bank deposit takers, and insurance companies. We have proved we can work together for a common goal – cash-flow and confidence – at pace. We recognise the threat of COVID-19 to our collective well-being and have responded accordingly to ensure we address the issues at hand and reduce the impact on futureRead More »
03 April 2020
The Reserve Bank continues to confirm that ATM cash deposit and withdrawal facilities and the system that supports them are functioning well and there is plenty of cash available.
“We are talking regularly with the major banks and their key service suppliers, and they continue to report that all is well,” Assistant Governor Christian Hawkesby said.
Mr Hawkesby said banks and customers are adjusting to a range of changes to ATM, branch, and retail cash operations as financial and other essential services settle into new requirements and operating environment.
“It is not unusual for ATMs to close down occasionally for any number of reasons. Some street-facing ATMs, for example, are now more difficult to service as they require entry
02 April 2020
The Reserve Bank is introducing a Term Lending Facility (TLF), a new longer-term funding scheme for the banking system, in support of the Government’s Business Finance Guarantee Scheme to help promote lending to businesses.
The TLF is similar to the recently announced, Term Auction Facility (TAF), and both provide liquidity to the banking system. The TLF aims to complement the Government’s Business Finance Guarantee Scheme, announced last week, by ensuring access to funding for banks at low interest rates for up to 3 years duration, which is longer than the Bank’s other liquidity facilities.
"We are working in-step with the Government and the country’s banks to provide the economic support that is crucially needed during this
30 March 2020
Te Pūtea Matua – the Reserve Bank of New Zealand – is working closely with the whole of government and industry to ensure financial stability.
“In these difficult times we are working to ensure New Zealanders are confident in their financial system, knowing that they can access their cash when needed to manage through,” Governor Adrian Orr says.
“Since the onset of COVID-19 in New Zealand, the Reserve Bank has undertaken a broad range of activities to ensure our banks are well positioned to meet the needs of New Zealanders.
“We have lowered the Official Cash Rate to 0.25 percent and have committed to it remaining at this record low for at least the next 12 months. We also began purchasing up to $30 billion of government bonds.
30 March 2020
The Reserve Bank is deploying another tool to provide additional liquidity to the corporate sector, and support smooth market functioning.
A new weekly Open Market Operation (OMO) will provide liquidity in exchange for eligible Corporate and Asset-Backed securities. Further operational details are available in a Domestic Markets release.
Assistant Governor Christian Hawkesby said this facility would provide another channel for banks to continue funding their corporate clients.
“Our objective is to encourage banks to continue to fund their corporate clients by purchasing their debt securities, given the confidence that these securities can be funded by exchanging them with us for cash. In this way, by banking the banks, we are
25 March 2020
Following the government announcement that COVID-19 Level 4 alert will be introduced from 11.59pm on 25 March only essential services will be permitted to remain open at a central place of business.
The Government determined that financial services are essential services. These are banking, insurance and other financial institutions which are deemed to be essential services and exempt from the directive to close.
The Council of Financial Regulators (CoFR) have consulted with the Government to provide detail on those financial services that should be considered to be essential services. This includes all financial institutions that are essential to ensure continue operation of our financial system and access to this system for all
24 March 2020
News release issued by the Minister of Finance
The Government, retail banks and the Reserve Bank are today announcing a major financial support package for home owners and businesses affected by the economic impacts of COVID-19.
The package will include a six month principal and interest payment holiday for mortgage holders and SME customers whose incomes have been affected by the economic disruption from COVID-19.
The Government and the banks will implement a $6.25 billion Business Finance Guarantee Scheme for small and medium-sized businesses, to protect jobs and support the economy through this unprecedented time.
“We are acting quickly to get these schemes in place to cushion the impact on New Zealanders and businesses from this
The Monetary Policy Committee (MPC) has decided to implement a Large Scale Asset Purchase programme (LSAP) of New Zealand government bonds.
The negative economic implications of the coronavirus outbreak have continued to intensify. The Committee agreed that further monetary stimulus is needed to meet its inflation and employment objectives.
Globally, the number of people infected with the virus has increased rapidly and measures to contain the outbreak have become more restrictive. Global trade and travel, and business and consumer spending have been curtailed significantly.
The severity of the impacts on the New Zealand economy has increased. Weaker global activity is affecting the economy through a range of channels, not just reduced trade. Domestic measures to contain the outbreak of
22 March 2020
The evolving COVID-19 outbreak has unsettled communities around the world, creating uncertainty about the future. New Zealand is no exception. But we start in the best possible relative position.
Our financial system is in good shape, with our trading banks having lots of capital and plenty of cash to help their customers through these testing times.
The Reserve Bank is making sure our financial system works effectively.
We cut the Official Cash Rate from 1 percent to 0.25 percent and committed to keep it there for at least the next year. This record low cost of borrowing will mean more cash in the hands of indebted households and firms to use for essential matters.
We also gave the banks a clear go ahead to use the capital they have
20 March 2020
New Zealand’s financial system remains sound, with strong capital and liquidity buffers.
Assistant Governor Christian Hawkesby said the Reserve Bank is actively involved in financial markets to ensure smooth market functioning despite the global uncertainty from COVID-19. Regular market operations continue to ensure there is ample liquidity in the financial system.
“The measures we are implementing today provide additional support to domestic financial markets. We will ensure our operations make financial markets operate smoothly,” Mr Hawkesby said.
"We are working in tandem with the banks, the wider financial market community, and the Government."
The provision of term funding
The Term Auction Facility (TAF) is a program that will
19 March 2020
“The Reserve Bank and the banking system have plenty of cash on hand to meet demand under any circumstances,” says Assistant Governor Christian Hawkesby. Mr Hawkesby made the statement today after public interest and discussion about cash availability and use.
“We work closely with New Zealand’s banks, the companies that transport cash, and those that supply cash-handling equipment. They are all prepared for operating during all circumstances, including any unusual challenges that COVID-19 may pose.” he says.
“As an example, the Reserve Bank has at least two years’ worth of replacement cash available to feed into the system if required. We can keep cash flowing to and from branches and ATMs in the event of staff shortages or other
The Reserve Bank of New Zealand is aware of media reports and public interest in the sale of the ownership of AMP Life to Resolution Life. It is helpful for the Bank to explain the process that is underway and where it fits in.
Resolution Life is proposing to purchase the shareholding in AMP Life Ltd from AMP Ltd. AMP Life is licensed as an insurer in New Zealand and operates as a branch with its head office in Australia. The change of shareholding will result in a change of control of AMP Life.
However, before any change of control of a licensed insurer takes place the Reserve Bank must be satisfied that the change of ownership does not alter the insurer’s ongoing eligibility to retain its New Zealand licence.
The overriding purpose that guides the Bank in any proposal before it is to
18 March 2020
The Reserve Bank will delay or slow down most of its regulatory initiatives for an initial period of six months. This action is being taken to reduce the regulatory impost on financial institutions and free up Reserve Bank and industry resources to support our economy and tackle the challenges created by COVID-19.
The Council of Financial Regulators (COFR) has met to discuss what can be done to allow financial institutions to focus on their businesses and customers at such a disruptive time.
Reserve Bank Deputy Governor Geoff Bascand said the Reserve Bank and other agencies are working closely to help ensure that New Zealand’s financial markets operate smoothly and effectively, and that credit is available to households andRead More »
The Official Cash Rate (OCR) is 0.25 percent, reduced from 1.0 percent, and will remain at this level for at least the next 12 months.
The negative economic implications of the COVID-19 virus continue to rise warranting further monetary stimulus.
Since the outbreak of the virus, global trade, travel, and business and consumer spending have been curtailed significantly. Increasingly, governments internationally have imposed a variety of restraints on people movement within and across national borders in order to mitigate the virus transmission.
Financial market pricing has responded to these events with declining global equity prices and increased interest rate spreads on traditionally riskier asset classes.
The negative impact on the New Zealand economy is, and will continue to be,
16 March 2020
New Zealand’s financial system is sound, with strong capital and liquidity buffers, but faces significant uncertainties from the impacts of COVID-19. The Reserve Bank is announcing additional measures to support the provision of credit and market functioning.
Reserve Bank Deputy Governor Geoff Bascand says the situation around COVID-19 is evolving rapidly, and there is much uncertainty.
“To support credit availability, the Bank has decided to delay the start date of increased capital requirements for banks by 12 months – to 1 July 2021. Should conditions warrant it next year, the Reserve Bank will consider whether further delays are necessary.”
“We are taking this action now to help support lending in the economy at time when there
The Reserve Bank of New Zealand, Te Pūtea Matua, will be making an announcement at 8am (NZ time) today via Bloomberg and Refinitiv pages, the Reserve Bank website, our Twitter channel, and an email to subscribers.
You can find out more about these channels on the How the Reserve Bank releases information page.
A live-stream of the media conference, with Governor Adrian Orr, will take place at 11am and will be available on the RBNZ YouTube channel.
Media Contact:Oliver BatesManager, External StakeholdersDDI: +64 4 474 8627Email: [email protected]
10 March 2020
The Reserve Bank of New Zealand, Te Pūtea Matua, is taking proactive steps to ensure it is well positioned to effectively and efficiently manage New Zealand’s monetary policy in an environment of very low interest rates.
In a speech launching its Principles on Using Unconventional Monetary Policy, Reserve Bank Governor Adrian Orr said as kaitiaki (caretakers) of Te Pūtea Matua, the Bank’s activities involve continuous assessment of our monetary policy framework, including the most effective tools and their best application.
Mr Orr said the Reserve Bank has not, and still does not, need to use alternative monetary policy instruments to the OCR, but it is best to be prepared.
“An inability to predict what might happen next is no excuse
09 March 2020
New Zealand banks are ready to respond to the impacts of coronavirus, the Reserve Bank of New Zealand and New Zealand Bankers’ Association say.
The COVID-19 outbreak has the potential to impact the operations of New Zealand’s banking sector by affecting banks’ staff, their funding and their customers.
The Reserve Bank has asked all banks about their risk management approaches and preparedness for COVID-19. Reserve Bank Governor Adrian Orr said the responses show the banks are prepared.
“Much of the banks’ focus has been on staff health and safety, and their ability to sustain their operations should the outbreak expand significantly. However, the banks are also well attuned to any impacts on their customers’ businesses, employment,
04 March 2020
As explained at the release of the February Monetary Policy Statement, the Reserve Bank will be releasing its high level principles around how it would assess and use unconventional monetary policy tools if ever needed. Governor Adrian Orr will be giving a short speech outlining the principles. The speech notes and principles will be available on the Reserve Bank website from 2pm on Tuesday 10 March.
The principles and speech will not discuss current economic conditions or the Reserve Bank’s outlook for the Official Cash Rate (OCR). The Reserve Bank’s next OCR decision is scheduled for March 25.
The Bank remains prepared in its business continuity role to ensure a well-functioning financial system, including ongoing consumer and
26 February 2020
The Reserve Bank has launched a new future-proofed payment settlement system, replacing New Zealand’s inter-bank settlement system and central securities depository.
The new platform replaces a 20-year-old system with two separate systems, ESAS 2.0 and NZClear 2.0. The new platform comprises the Real Time Gross Settlement (RTGS) and Central Security Depository (CSD) applications supplied by SIA – a European technology and banking infrastructure leader and its wholly owned subsidiary Perago. Infrastructure support services are supplied by Datacom Systems Limited.
The extent of change is significant, says Assistant Governor/Chief Financial Officer Mike Wolyncewicz.
“Every day, transactions with a value of more than $30 billion are
25 February 2020
Cyber-attacks could cost New Zealand’s financial sector more than $100 million a year on average according to a new Reserve Bank bulletin article, highlighting the need for industry resilience to counter these threats.
Part of an expanding programme of work on risks to the financial system, Cyber incident cost estimates and the importance of building resilience examines the financial sector’s resilience to cyber threats and estimates the potential costs to the country’s financial system, using two internationally recognised methods.
The authors Aria Zhang, Rosie Collins, and Cavan O’Connor-Close estimate an indicative average cost of cyber incidents of $104 million a year for the banking sector and $38 million annually for the
21 February 2020
The Reserve Bank of New Zealand, Te Pūtea Matua, is evolving so it is well positioned to respond to new challenges, risks, and opportunities, Governor Adrian Orr said in a speech today.
Speaking at Canterbury Employers’ Chamber of Commerce in Christchurch, Mr Orr shared his reflections since re-joining the Reserve Bank two years ago. The new challenges facing the Bank include record low international interest rates, a wider regulatory remit for the Bank, new legislative requirements on purpose and governance, changing societal expectations of business conduct and culture, emerging technologies, and climate change.
Mr Orr also explained the work that is underway to ensure the Bank continues to best promote the prosperity and
19 February 2020
Reserve Bank of New Zealand Governor Adrian Orr has delivered an opening statement today at the Finance and Expenditure Committee (FEC) hearing of the 2018-19 Annual Financial Review of the Reserve Bank.
Read the Governor’s opening statement:
Kaitiakitanga: Te Ao Māori o Te Pūtea Matua – Guardianship: The Māori World View of the Reserve BankFebruary 13, 2020
14 February 2020
Building its understanding of Te Ao Māori will result in the Reserve Bank better serving Aotearoa New Zealand, said Assistant Governor, Christian Hawkesby.
Speaking at the Mana Taiao Raising Māori Investment Capability conference in Tauranga yesterday, Mr Hawkesby outlined how the Reserve Bank – Te Pūtea Matua – was building and integrating a Māori world view, through cultural capability, policy and engagement.
“We are New Zealand’s central bank and Māori values are part of our national identity – how we see ourselves, and how we are viewed by the world. It is one trait that should mark the Reserve Bank of New Zealand apart as the central bank for Aotearoa.”
In addition to embedding Te Reo and Māori tikanga into its culture, Mr
Tēnā koutou katoa, welcome all.
The Monetary Policy Committee has decided to keep the Official Cash Rate (OCR) at 1.0 percent.
Employment is at or slightly above its maximum sustainable level while consumer price inflation is close to the 2 percent mid-point of our target range. Low interest rates remain necessary to keep employment and inflation around target.
Economic growth is expected to accelerate over the second half of 2020 driven by monetary and fiscal stimulus, and the high terms of trade. The outlook for government investment is stronger following the Government’s announcements in December. There are also indications household spending growth will increase.
However, soft momentum in economic growth has continued into early 2020. Slower global growth over 2019 acted as a
10 February 2020
The Reserve Bank of New Zealand (RBNZ) has streamlined its external whistleblowing policy for those employed by regulated entities.
Individuals currently or formerly employed by insurers, banks or non-bank deposit takers regulated by the Reserve Bank, who have witnessed or become aware of misconduct within their organisation, can now report this directly to the Reserve Bank via a designated email address and phone number.
“Whistleblowing is a critical avenue for those wanting to shine a light on wrongdoing within regulated entities,” Head of Supervision Andy Wood says.
“Exposing such behaviour is the first step to resolving it, and is critical to maintaining trust and confidence in the country’s insurers, banks or non-bank deposit
07 February 2020
The Reserve Bank today announced the 2021 dates for releasing its quarterly Monetary Policy Statements (MPS), Official Cash Rate (OCR) decisions, and the six-monthly Financial Stability Reports (FSR).
The release dates for 2020 remain unchanged.
From 2021, the Bank is adopting a new rule for the release dates of MPS and OCR decisions, which includes some flexibility to shift the date in case of conflicts with other important releases or events. This change helps the Reserve Bank fully incorporate the most recent labour market data into its forecasts when the Monetary Policy Committee reviews the economic environment and future prospects.
MPS/OCR review dates will shift to, in principle, around two weeks later compared with the
07 February 2020
The Reserve Bank of New Zealand has won the ‘Transparency Award’ at the Central Banking Publications annual awards for its work on the Monetary Policy Handbook.
Reserve Bank Governor Adrian Orr said it was a great honour to receive this year’s Central Banking Transparency Award.
“We want to be a ‘Great Team, Best Central Bank’ and transparency plays a crucial part to get there. This award recognises our efforts to bringing a higher level of transparency and accountability in achieving our mandate,” Mr Orr said.
Central Banking Publications stated the handbook was clearly written and informative. They were particularly impressed with the new approach in information-sharing that the handbook represents, “It shows the Reserve Bank’s
29 January 2020
Understanding the impact of the global economy and its effects on New Zealand are critical to the Reserve Bank when it considers Monetary Policy.
In a speech today to the Goldman Sachs Annual Global Macro Conference in Sydney, Reserve Bank Assistant Governor Christian Hawkesby set out the framework the Bank used to analyse the global economy and its influence on New Zealand.
“Using a simple framework with trade, financial, and uncertainty channels helps us try and make sense of a complicated world, and the policy implications for New Zealand,” Mr Hawkesby said.
The Monetary Policy Committee will begin meeting next week for the first time since November, and Mr Hawkesby stressed his remarks did not represent the formal view of the