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.”