Today the OCR (official cash rate) was announced at 3.5% - dropping 25 base points from its former 3.75%.
The rate, which was predicted to drop, has not been this low since October 2022, and the news has encouraged major banks to reduce interest rates on mortgages.
This is the second OCR review of the year and the first for NZ Reserve Bank governor Christian Hawkesby. Hawkesby took over from ex-boss Adrian Orr as acting governor in early March, only becoming official governor earlier this week. Hawkesby will only serve in the role for six months while the recruitment for a permanent candidate takes place.
The OCR is measured seven times a year and is the interest rate that the reserve bank sets on loans to commercial banks.
The drop comes amid slowing inflation and concerns about consumer spending and global pressures such as new US tariffs.
In a media release, The Reserve Bank said the recently-announced increases in global trade barriers create risks to the outlook for economic activity and inflation in New Zealand.
The next OCR update will take place on May 28.
