The Reserve Bank of New Zealand embarked on its rate cutting cycle in August:
August: The RBNZ reduced the Official Cash Rate (OCR) by 25 basis points, bringing it down to 5.25%. This marked the first rate cut since March 2020, signaling a shift from the previous tightening stance.
October 2024: In response to a weakening economy and subdued inflation, the RBNZ implemented a more substantial cut of 50 basis points, lowering the OCR to 4.75%. This decision aimed to provide additional stimulus to the economy.
And, coming up next week, the RBNZ is anticipated to announce another rate cut in its upcoming meeting on November 27, with expectations of a 50 basis points reduction. This move is intended to support economic activity amid ongoing challenges.
- ANZ forecast a 50bp interest cut from the RBNZ next week
- Reuters poll: RBNZ to cut cash rate to 4.25% on November 27
NZD/USD has dropped to lows circa 0.5830. AUD is not following it lower, with the Reserve Bank of Australia on hold for now (February /May expected for the first cut) AUD/NZD is supported, and it is at its highest since October 2022.
