WELLINGTON, May 31 (Reuters) - The Reserve Bank of New
Zealand (RBNZ) would prefer to have monetary stimulus in place
for a longer period of time than take it away too quickly, a
senior official said on Monday.
RBNZ Assistant Governor Christian Hawkesby said the
implications of the COVID-19 pandemic were not yet over so the
amount of monetary stimulus needed was little changed from
"Our messages around having stimulus in place for a
considerable period of time, being patient and our least regret
is keeping stimulus in place for too long rather than taking it
away too quickly, all of those messages stay in place," Hawkesby
said in an interview.
New Zealand's central bank held interest rates last week but
hinted at a hike as early as September next year, becoming one
of the first advanced economies to signal a move away from the
stimulatory settings adopted during the COVID-19 pandemic.
Hawkesby said RBNZ felt it was the right time to
re-introduce projections of the official cash rate (OCR) as the
main policy signal for markets to focus on.
The bank's positive outlook, driven by a faster than
expected domestic recovery from the pandemic and the global
vaccine rollout, prompted the New Zealand dollar to
Hawkesby said RBNZ was aware there were risks in publishing
the OCR track as the markets would tend to get ahead of the
bank's bias when it came to pricing in tightening.
"We also had awareness that it will take some time for
markets to remember that these are conditional projections," he
Hawkesby said that the resurgence of COVID-19 in Australia
and other Asian countries were a reminder of the level of
uncertainty that still remains.
"The recent outbreaks illustrate there is light at end of
tunnel but there is still much uncertainty on the path we take
to get there. So it could be faster or slower," he said.
(Reporting by Praveen Menon; Editing by Lincoln Feast & Simon