The Reserve Bank has cut the Official Cash Rate by 50 basis points to 2.5%, in a move aimed at easing pressure on households and businesses.
The Monetary Policy Committee announced the decision at 2pm today, reaching a consensus to lower the rate.
It signalled further cuts may be possible if needed to maintain inflation around the 2% midpoint of its target band.
The OCR now down from 5.5% just over a year ago, a three percentage point drop that reflects growing confidence inflation is under control.
Finance Minister Nicola Willis welcomed the move, saying it was “good news for growth, jobs, and investment,” and would bring relief to mortgage-holders.
“Assuming today’s reduction is passed on in full, minimum repayments for a family with a 25-year, $500,000 mortgage will be more than $400 less a fortnight than they were in the middle of last year.”
Willis credited the Government’s swift action in refocusing the Reserve Bank on inflation and curbing wasteful spending, which she said had overheated the economy.
Inflation has now remained within the 1–3% target band for four consecutive quarters.
“Lower interest rates are part of the picture, but we’re also a reforming Government focused on jobs, incomes, and ensuring every Kiwi has the opportunity to get ahead,” she said.
