The Reserve Bank of New Zealand (RBNZ) today cut interest rates by 50 basis points to 7.50 per cent – 25 basis points more than was expected – as the economy continues to falter.
While the Reserve Bank noted that New Zealand’s rate of inflation was expected to hit 5 per cent in the September quarter, weak economic growth would see it trend down thereafter.
“With medium-term inflation pressures expected to ease, it is appropriate to move towards a less restrictive monetary policy stance,” Alan Bollard, RBNZ governor said.
The RBNZ last cut interest rates by 25 basis points in July this year – the first reduction to the cash rate in five years.
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