The Reserve Bank has kept its official cash rate (OCR) unchanged at 0.25 per cent and has left its bond buying cap at $100 billion, but said it would look at offering cheaper funding for the banks towards the end of the year.
The central bank , in its latest monetary policy report, largely kept to the script expected of it from the market, aside from its comment that it aimed to have funding for lending (FLP) for the banks in place by the end of this year.
On March 16, amid the depths of concern about the worldwide spread of Covid-19, the central bank cut its OCR by 75 basis points to the current level and said it would remain at that level "for at least the next 12 months".
The messaging from the bank as to the OCR's future path has remained the same since March, but current market pricing suggests it may move earlier.
Chief Economist at ANZ Bank Sharon Zollner joined Mike Hosking to explain what this all means.
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