October OCR Cut. What happened?

OCR Cut: The Reserve Bank of New Zealand (RBNZ) cut the Official Cash Rate (OCR) by 50 basis points (0.5%) to 4.75%.

Policy Statement: The RBNZ’s decision was data-dependent, with the next review scheduled for November 27.

Economic Conditions: Domestic economic activity is weak, with increasing excess capacity leading to lower inflationary pressure.

Inflation Outlook: Annual consumer price inflation is expected to fall within the RBNZ’s target range, with a significant drop anticipated in the upcoming CPI report.

Banks Reduce Rates: NZ Banks largely passed through the full 50 basis points cut on their floating rates. As of 15 October, half of NZ Banks have passed through a lower 30-basis points to short term fixed rates with the rest only passing through 10 basis points.