The Reserve Bank of New Zealand’s Monetary Policy Committee (RBNZ) decided to cut the official cash rate (OCR) by 0.50% to 4.25% at its meeting this morning, Wednesday, November 27, as expected, for the third consecutive time.
The statement issued by the bank indicated that annual consumer price inflation is declining and is now close to the midpoint of the committee’s target range of 1-3%, as is the case for core inflation expectations, and the committee expects to be able to cut further early next year as economic forecasts continue to be successful.
The statement indicated that economic growth is expected to recover during the coming year 2025, as low interest rates encourage investment and spending, but employment growth is expected to remain weak until the middle of the year.
The New Zealand central bank’s move was the fastest among global central banks, with interest rates cut by 125 basis points in the last three meetings, but estimates indicate that the bank will reduce the pace of cuts next year, with expectations indicating that interest rates will reach 3.50% in the first half of the year to 3% by the second half, which reflected the rise in the New Zealand dollar today
23/12/2024
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