MNI BRIEF: RBNZ Cuts OCR 50bp To 4.75%
MNI (SYDNEY) - The Reserve Bank of New Zealand monetary policy committee has eased the official cash rate 50 basis points to 4.75%, noting inflation has moved inside the 1-3% target and is converging on the 2% midpoint.
The RBNZ’s move was largely anticipated and follows August’s decision, which saw the Bank start its easing cycle with a 25bp cut. (See MNI RBNZ WATCH: MPC To Weigh Easing Pace, 50bp Cut Eyed)
“The New Zealand economy is now in a position of excess capacity, encouraging price- and wage-setting to adjust to a low-inflation economy,” the committee noted in a statement. “Lower import prices have assisted the disinflation. Labour market conditions are expected to ease further, with filled jobs and advertised vacancy rates continuing to decline. More generally, weak house price growth, lower levels of net immigration, and ongoing fiscal consolidation from spending restraint, are expected to constrain aggregate demand growth.”
The committee also discussed easing by 25bp before reaching consensus on the 50bp cut.
The MPC will meet again on Nov 27.