PHOTO: Experts expect the Official Cash Rate to remain at 0.25 percent. Photo credit: Getty.
The Reserve Bank is set to make an announcement on the Official Cash Rate (OCR) on Wednesday.
Currently 0.25 percent, the Reserve Bank left the OCR unchanged in May. To inject money into the economy and reduce the cost of borrowing, the large scale asset purchase (LSAP) programme limit increased to $60 billion.
The effects of COVID-19 continue to play out in the economy, with Gross Domestic Product (GDP) falling by 1.6 percent in the March quarter. However, economists at ANZ and Kiwibank expect the OCR to remain unchanged.
ANZ chief economist Sharon Zollner said that upon delivering the 0.75 basis point cut in March, the Reserve Bank signaled the OCR would remain at that level for at least 12 months. There is currently no reason for the Reserve Bank to retract that decision.
“The [Reserve Bank) has ruled out changing the OCR and there’s no need to adjust qualitative easing yet,” Zollner said.
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