Outlook for Borrowers: July update
The outlook for NZ interest rates is being driven by a complex interplay between mixed domestic economic data, and heightened policy uncertainty amid trade tensions and geopolitical risks. The level of uncertainty was highlighted by the Reserve Bank of New Zealand (RBNZ) at the May Monetary Policy Statement (MPS), when the Official Cash Rate (OCR) was reduced by 25bp to 3.25%.
Outlook for Borrowers: Post May MPS
The Reserve Bank of New Zealand (RBNZ) reduced the Official Cash Rate (OCR) by 25bp to 3.25% at the Monetary Policy Statement (MPS) on Wednesday. The rate cut was expected by economists and fully discounted by overnight index swap (OIS) market pricing. The decision was reached by a 5-1 majority. The dissenting Committee member preferred to leave the OCR unchanged at 3.50%. There was no discussion of a 50bp cut.