New Zealand’s Reserve Bank has slashed the official cash rate (OCR) by 50 basis points to 2.5 percent in a move that surprised many in the markets.
It also signalled that there may be further easing in future.
The rate is at a two-year low as the country’s economy continues to contract, unemployment increases, and New Zealanders hold onto their money in response to uncertainty.
Announcing the decision, the Bank’s Monetary Policy Committee said the annual consumer price index (CPI) inflation is currently near the top of its 1 to 3 percent target band but, with spare capacity in the economy, inflation is expected to return to around the 2 percent target mid-point over the first half of 2026….
New Zealand’s Central Bank Drops Cash Rate to 2.5 Percent as Economy Wobbles
