Reserve Bank of New Zealand cash rate dropped to 4.75% from 5.25%,
The 50bp cut was widely expected.
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Statement summary points:
- New Zealand is now in a position of excess capacity.
- Low import prices have assisted disinflation.
- The committee assesses annual consumer price inflation within its 1-3% target.
- It is appropriate to cut the OCR by 50 bps to achieve and maintain low and stable inflation.
- Business investment and consumer spending have been weak, and employment conditions continue to soften.
- Geopolitical tensions remain a significant headwind for world economic activity.
- New Zealand's economy is now in a position of excess capacity, encouraging price- and wage-setting to adjust to a low-inflation economy.
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