New Zealand’s Interest Rate Cut Tops Expectations – Currency Thoughts
New Zealand’s Interest Rate Cut Tops Expectations
October 8, 2025
The Reserve Bank of New Zealand’s decision involved an interest rate change that exceeded analyst expectations. The Official Cash Rate was cut by 50 basis points, twice the street’s forecast. At 2.50%, the new OCR level drops to its lowest since August 2022 and a full three percentage points below the peak of 5.5% maintained from May 2023 until an initial cut in August 2024. A released statement explaining today’s unanimous decision talks about persistent weak growth and asserts that 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.” The CPI in the second quarter had been 2.7% higher than a year earlier… The Committee remains open to further reductions in the OCR.”
Copyright 2025, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: Reserve Bank of New Zealand
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