2019.09.2600:43:00UTC+00New Zealand Unlikely To Need Unconventional Policy Tools, RBNZ Chief Says

Although questions have been raised about the possibility of negative interest rates and alternate monetary policy strategies, the need for 'unconventional' tools are unlikely, Reserve Bank of New Zealand Governor Adrian Orr said Thursday.

Interest rates will remain low for a number of years, providing a great environment to invest, he told NZX Issuer Forum in Auckland.

"The good news for New Zealand, unlike many other OECD economies, is that our government's books are in good shape, with room to expand investment, and there is already a strong fiscal impulse underway from public spending and investment," said Orr.

The governor noted that with relatively low levels of debt, and ongoing demand for goods and services, New Zealand businesses are well positioned.

RBNZ is currently thinking hard about questions on negative interest rates and other strategies, because it makes sense to do so as a precaution - it's best to put the roof on when the sun is shining, he said.

"Our current view is that we are unlikely to need 'unconventional' monetary policy tools. But we would be remiss not to be prepared," Orr added.