With inflation decreasing, New Zealand’s central bank has cut interest rates for the first time in four years.
On Wednesday, the Reserve Bank of New Zealand cut the official cash rate from 5.5 per cent to 5.25 per cent.
The decision was a surprise to many economists, given the RBNZ warned in May it may not cut rates until August 2025.
However, fresh data releases in the three months since then – including a fall in headline inflation to 3.3 per cent – has prompted RBNZ governor Adrian Orr to move.
“Surveyed inflation expectations, firms’ pricing behaviour, headline inflation, and a variety of core inflation measures are moving consistent with low and stable inflation,” he said.