OCR down to 3%

The Reserve Bank has reduced the Official Cash  rate by 50 basis points to 3%.

The OCR has gone down 525 baisis points in six months but Reserve Bank governor Alan Bollard has signalled he’s not expecting big cuts from now:

“As economic activity troughs, we expect the rapid easing of monetary policy to slow. Any future cuts will be much smaller than observed recently. We do not expect to see in New Zealand the near-zero policy rates of some countries. New Zealand needs to retain competitiveness in the international capital markets. We will assess the need for further cuts in the OCR against emerging developments in the global and domestic economies and the responses to policy changes already in place.”

6 Responses to OCR down to 3%

  1. poneke says:

    Wow! Gosh! Goodness gracious me!

    The OCR has been reduced to 3pc!

    What stunning news. Thank you for revealing this world exclusive.

    If you hadn’t reported this, nobody would ever have known.

    Keep up the good work.

    Like

  2. Well actually Poneke, I hadn’t got round to reading the papers, when a neighbour actually rung me to see what had happened to the OCR.
    He’s selling his house you see, so had I not looked here earlier, i would not have known.
    So, thank you Homepaddock.

    Like

  3. Matt Nolan says:

    Wow Poneke, wth. Putting up a post about the OCR is just like putting up a discussion board – if people had things they wanted to say about the cut they could just put it in comments.

    For example when I saw the post I was going to come on and say something, namely: I think the number of cuts going forward will strongly depend on the Bank’s world growth forecasts – and so are incredibly uncertain (more than usual).

    Please don’t use your razor sharp wit to tell me that my comment is extremely obvious …

    Like

  4. XChequer says:

    I’m glad that the RBNZ was not tempted to go 100 points. Like Britain, we could have left nothing in the kitty for future efforts should this “crisi” turn out to be a little longer that expected.

    XChequer
    http://thenzhomeoffice.blogspot.com/

    Like

  5. Sally says:

    What a tosser he is!

    Like

  6. This won’t make much difference. It just means savers have less money and no one in their right mind would be taking on a new mortgage right now…and the banks will want 20% deposit anyway. A valuation right now isn’t worth the paper it’s printed on.

    The main effect of this move is to take millions more out of the incomes of savers……

    It’s a contractionary move. They don’t think so, but that is what it will be when the flow-on effects accumulate.

    I’ve heard our own banks are still relying on the government’s forex reserves to roll over their international loans in the dry international lending climate. I’d like to know more about that.

    Like

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