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.
Outlook for Borrowers: Post April MPR
The Reserve Bank of New Zealand (RBNZ) reduced the Official Cash Rate (OCR) by 25bp to 3.50% at the Monetary Policy Review (MPR) on Wednesday. This was unanimously anticipated by economists. The Bank had previously provided guidance for the 25bp move during the February Monetary Policy Statement (MPS). The overnight index swap (OIS) market implied a chance of a larger 50bp cut, given the recent increase in global trade barriers.