MNI BRIEF: RBNZ Cuts OCR 50bp To 3.75% As Expected
MNI (MELBOURNE) - The Reserve Bank of New Zealand monetary policy committee cut the Official Cash Rate a further 50 basis points to 3.75% on Wednesday, noting scope existed for further easing throughout 2025.
“With headline CPI inflation close to the midpoint, measures of core inflation converging on the midpoint, stable business inflation expectations, and significant spare capacity in the economy, the Committee agreed that a further reduction in the OCR was appropriate,” the MPC said in a statement following the decision.
“If economic conditions continue to evolve as projected, the Committee has scope to lower the OCR further through 2025.”
The decision was widely expected and follows a series of cuts in late 2024, as the Reserve aims to chart a course towards neutral, which it sees anywhere between 2.5% and 3.5% (See MNI RBNZ WATCH: MPC To Cut Another 50bp, Chart Neutral Course)
The RBNZ's updated forecasts also published today showed the OCR at 3.1% and CPI at 2.5% by December, changed from the 3.6% and 2.4% noted in November.