New Zealand cuts interest rate to record low

New Zealand’s central bank cut interest rates to a record low yesterday, the first reduction in two-and-a-half years as policymakers look to provide support in the face of slowing economic growth. The move comes as central banks around the world take a more dovish stance on monetary policy as the global economy stutters and the China-US trade war rumbles along.

The Reserve Bank of New Zealand reduced the official cash rate to 1.5 per cent from 1.75pc, where it has been since November 2016, and just months after saying it expected it to keep them on hold until 2021. “The (bank) decided a lower OCR (Official Cash Rate) is necessary to support the outlook for employment and inflation consistent with its policy remit,” governor Adrian Orr said.

The New Zealand dollar dropped half a US cent to 65.55 US cents on the announcement, with analysts tipping another rate cut before the end of the year.cision to cut was unanimous.