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RNZ News
24 minutes ago
- Business
- RNZ News
Reserve Bank's statement a 'dovish pivot'
Photo: RNZ While the Reserve Bank's 25 basis point cut to the Official Cash Rate was in line with expectations, economists say the decision came with a "dovish pivot", prompting greater expectations for further rate cuts. The country's biggest bank, ANZ, now expects two further cuts to happen in October and November, compared to their previous forecast of November and February. "While a 25bp cut was universally expected, the forecasts and the tone of the discussion were much more dovish than we - or the market - had anticipated," ANZ chief economist Sharon Zollner said. "We thought this week would be too early for the RBNZ to pivot to our view of things, but that's precisely what happened," she said. Financial markets also viewed the RBNZ statement as dovish, with the New Zealand dollar falling sharply against its major trading partners after the announcement. "The RBNZ has today brought about a meaningful easing in monetary conditions that will help shore up the economic recovery," Zollner said. "With upside inflation risks looking contained, that's the appropriate strategy, in our view." Cotality chief property economist Kelvin Davidson said the housing market effects from Wednesday's decision were likely to be small. "If anything, the possibility of more falls in mortgage rates than previously thought could lift activity and house prices a bit," he said. "But those rate changes may be fairly minor." "And in the meantime, as the RBNZ has indicated, the economic and labour market outlook is still disappointing - which will tend to weigh on housing, as it's already doing." Davidson said concerns about job security may mean that existing borrowers shifting to lower interest rates might decide to save their extra cash or reduce the term of their loan, rather than spending it in the economy or the property market. Australian economist David Bassanese from Betashares said the RBNZ's decision was a "missed opportunity" for a 50 basis point cut. The decision by the RBNZ to reduce the OCR to 3 percent was split, with four members favouring a smaller 25 basis point cut, compared to the two members who wanted a 50 basis point cut. "The timid policy response in the face of a weak domestic economy does pose the risk of the economy tipping back into recession," Bassanese said. "Arguably, the RBNZ could have been justified in applying some shock therapy to the moribund economy with a larger-than-expected 0.5 percent rate cut today," he said. "In a sense, that was a missed opportunity."
RNZ News
3 hours ago
- Business
- RNZ News
Reserve Bank cuts OCR to 3%
Photo: RNZ The Reserve Bank has cut its benchmark cash rate by 25 basis points to a three year low of 3-percent, as expected. While the question remains if any more drops are on the horizon, there was an overwhelming expectation the central bank's monetary policy committee would cut on Wednesday, after pausing in July. The central bank on Wednesday said it was watching economic numbers and the global outlook which will influence whether a further rate cut is needed. The RBNZ aggressively cut the OCR by 225 basis points from 5.5 percent to the current 3.25 percent from August last year. RBNZ governor Christian Hawkesby will be speaking at 3pm to explain the decision. Sign up for Ngā Pitopito Kōrero , a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
RNZ News
12-08-2025
- Business
- RNZ News
BNZ cuts home loan rates ahead of OCR announcement
BNZ has cut some fixed home loan rates in anticipation of an OCR cut next week. The rate cuts included dropping the six-month rate by 0.2 basis points to 5.09 percent and the one -year rate by 0.1 points to 4.79 percent. The new rates were available for new customers, as well as existing customers who are in their rollover period or currently on variable rates. It comes after ANZ cut some of its rates earlier this week . Sign up for Ngā Pitopito Kōrero , a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
