Today, Statistics NZ reports that "the consumers price index (CPI) fell 0.5 percent in the June 2020 quarter as the COVID-19 global pandemic saw cheaper petrol and falling hotel and motel prices". Should there be further drops in the CPI in the context of an Official Cash Rate stuck close to zero percent, then NZ could start to experience rising real interest rates. (The real rate equals the nominal rate minus the inflation rate). Rising real rates at a time of economic weakness can be bad news for the economy. Since they mean that the real cost of borrowing is rising (after adjusting for inflation).
Last year, I wrote an article arguing that the 50 basis point OCR cut by the RBNZ in August was a mistake. One of the reasons was that the cut took the OCR so close to zero that if there was a recession in the near future (which did end up eventuating) then the RBNZ would be unable to cut rates much further. Which is the situation NZ finds itself in now.
For the full article, see: