New Zealand has been among the countries that to date have kept their Covid cases better under control with strict blockades and the closure of its borders. Now the Delta variant risks undermining the Zero Covid strategy carried out by the premier Jacinda Arden who yesterday announced a nationwide lockdown following the emergence of the first Covid case in six months in Auckland, largest city in the country.
Already today the number of detected cases has risen to seven linked to the highly transmissible delta variant.
Hard lockdown: everyone home for a week
The lockdown will keep Auckland and the Coromandel Peninsula locked for seven days, while the rest of the nation will observe a three-day lockdown. The level 4 restrictions they are the highest in the country and the most restrictive, where people must stay at home and can only go out for essential services and severely limited travel. All non-essential businesses closed, including bars, restaurants, cinemas and playgrounds. All indoor and outdoor events are prohibited, while schools have switched to online teaching. Essential services remain open, including supermarkets and pharmacies.
Rbnz postpones rate hike
A move that immediately had repercussions on the choices of the Reserve Bank of New Zealand (Rbzn), whose meeting scheduled today ended with nothing. The Rbzn has in fact left the rates at 0.25%, motivating the decision precisely by virtue of the imposition by the government of COVID level 4 restrictions on activity throughout New Zealand.
The Bloomberg consensus was oriented towards an initial tightening on rates with a rise to 0.50%. The Rbnz would thus have been the first central bank among the advanced countries to proceed with a squeeze on post-Covid rates after most central banks globally cut rates to historic lows in an effort to bolster their pandemic-affected economies.
The zero-Covid strategy imposed by the New Zealand government, the number of Covid cases since the beginning of the pandemic has been limited to about 2,500 total cases, including 26 deaths, among the lowest in the world. The combination of minimal Covid restrictions and generous stimulus led the economy to run with a parallel rise in inflation, which had pushed expectations of a tightening monetary policy start.