75-Basis Point Official Cash Rate Cut at the Reserve Bank of New Zealand

March 16, 2020

The Reserve Bank of New Zealand slashed its Official Cash Rate to 0.25% from 1.0%. This was the first reduction in 7 months and the ninth cut from a peak of 3.50% prior to June 2015. The action today is meant to counter the drag of the coronavirus pandemic, about which officials observed, “The negative impact on the New Zealand economy is, and will continue to be, significant. Demand for New Zealand’s goods and services will be constrained, as will domestic production. Spending and investment will be subdued for an extended period while the responses to the COVID-19 virus evolve.” Officials do not expect to raise the interest rate for at least 12 months.

Copyright 2020, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

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