How low will the RBNZ go?

Most economists expect neutral to come sooner. (Image: Getty)

Tue, 20 Aug 2024

Data over the past few days vindicates the Reserve Bank of New Zealand’s rate cut, but how low will it go? Last week, the Reserve Bank (RBNZ) cut the official cash rate (OCR) by 25 basis points to 5.25%, signalling a further 50bps of OCR cuts by year-end.It then forecasts a further 100 bps of cuts over 2025 (3.85% OCR by year-end) and an end-point of just below 2.98% in 3Q 2027. This was a massive shift from its May forecasts and is largely down to weaker-than-expected growth based on so-called “high-frequency data&rd...

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