The Monetary Policy Committee is now chaired by governor Christian Hawkesby, who has taken the role on an interim basis following the shock resignation of Adrian Orr last month
[WELLINGTON] New Zealand’s central bank cut interest rates for a fifth straight meeting and said it has scope for further reductions as US tariffs create downside risks for both economic growth and inflation.
The Reserve Bank of New Zealand’s (RBNZ) Monetary Policy Committee lowered the Official Cash Rate (OCR) by 25 basis points to 3.5 per cent, as expected by all 23 economists in a Bloomberg survey.
“The recently announced increases in global trade barriers weaken the outlook for global economic activity,” the RBNZ said. “On balance, these developments create downside risks to the outlook for economic activity and inflation in New Zealand. As the extent and effect of tariff policies become clearer, the Committee has scope to lower the OCR further as appropriate.”
The RBNZ may need to take the OCR below the 3 per cent floor it signalled in February as US President Donald Trump’s tariffs threaten to damp global growth and sap demand for New Zealand exports. Finance Minister Nicola Willis yesterday warned that New Zealand’s recovery from its 2024 recession will be harder because of the trade barriers.
The New Zealand dollar was little changed at 55.46 US cents. Prior to the decision, it briefly fell to a five-year low below 55 US cents.
Today’s RBNZ decision was an interim rate review, meaning the bank does not hold a press conference or issue new forecasts. The Monetary Policy Committee is now chaired by governor Christian Hawkesby, who has taken the role on an interim basis following the shock resignation of Adrian Orr last month. BLOOMBERG
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