MNI BRIEF: RBNZ Lowers OCR 25bp To 3%

The Reserve Bank of New Zealand Monetary Policy Committee cut the Official Cash Rate 25 basis points to 3.0% on Wednesday and signalled further easing if inflation continues to fall.

The decision was split 4-2, with members debating a 50bp or 25bp reduction, and was broadly anticipated by markets. (See MNI RBNZ WATCH: MPC Likely To Cut 25bp To 3%)

“Reducing the OCR by 25 basis points at this meeting provides the opportunity to adjust this view incrementally in response to new information,” the MPC said in its statement.

Updated forecasts showed the OCR track lowered 20bp to 2.7% by December. The Bank also lifted its year-end inflation forecast 30bp to 2.7% and raised its unemployment outlook 10bp to 5.2%.