New Zealand can count itself as one of the most successful countries in the world in managing to almost eliminate Covid-19 from within its border, at least for now. However, the economic cost is set to be high, economists at Rabobank brief.

Key quotes

“Not only has more fiscal spending been promised in the May budget, but the market is anticipating further monetary policy adjustments at the May 13 RBNZ meeting.” 

“Speculation has been mounting that Governor Orr will announce an expansion to the new QE programme. Additionally, talk has been circulating that the central banks could push interest rates below zero.” 

“We see scope for NZD/USD dipping lower towards 0.57 on a 3-month view.” 

“There is a rocky road for the economy to pass through between now and September. This could bring additional volatility for the NZD.”