There has been increasing speculation that the RBNZ may need to cut its Official Cash Rate (OCR) into negative territory at some point in the future - to provide further support to the economy. In this paper AMP Capital’s Fixed Income team look at the offshore experience of negative rates, their likely efficacy in a New Zealand context, and what a negative cash rate would mean for fixed income returns. While not our base case, we certainly wouldn’t discount a move to a negative cash rate in the future.
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