We are first to admit that the front line economic support is fiscal policy. However, we have managed to provide significant assistance by continuing to focus on maintaining price stability and supporting maximum sustainable employment, and promoting financial stability. While our goals remain strongly relevant, we have had to develop and implement some new strategies and tools to ensure we are most effective.
As already mentioned, the pandemic struck at a time of already historically low nominal interest rates. The implication being that – like many other central banks globally – Te Pūtea Matua was limited in its ability to reduce the Official Cash Rate (OCR) before reaching zero or some notional effective lower bound.