Economist reacts to Reserve Bank expanding QE to $100 billion

Author
Newstalk ZB,
Publish Date
Thu, 13 Aug 2020, 11:33AM
Reserve Bank Governor Adrian Orr. Photo / Mark Mitchell

Economist reacts to Reserve Bank expanding QE to $100 billion

Author
Newstalk ZB,
Publish Date
Thu, 13 Aug 2020, 11:33AM

The Reserve Bank has increased its ability to effectively print money but won't be able to go any higher.

The central bank's kept the Official Cash Rate at 0.25 percent but has increased its quantitative easing limit from $60 billion to $100 billion.

Westpac chief economist Dominick Stephens told Mike Hosking that's as far as it can go because there are no more Government bonds to buy than that.

“If the Reserve Bank needs to use even more monetary stimulus, it'll need another tool."

Stephens says last year the Reserve Bank said a negative OCR was an option.

"I think what Adrian Orr was saying that it’s not needed right now. And they’re still saying, but if something happens, it’s the next cab of the rank."

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