WELLINGTON, Aug. 20 (Xinhua) -- New Zealand's central bank on Wednesday lowered the Official Cash Rate (OCR) by 25 basis points to 3 percent.
Annual consumer price inflation currently sits near the top of the 1-to-3 percent target band but is expected to return to the 2 percent midpoint by mid-2026 due to easing domestic inflation pressures and spare economic capacity, according to a statement by the Reserve Bank of New Zealand's Monetary Policy Committee.
The country's economic recovery stalled in the second quarter amid global economic policy uncertainty, falling employment, higher essential costs, and declining house prices, it said.
Looking ahead, cautious household and business behavior could slow growth further, though the economic recovery might accelerate as recent interest rate cuts take effect, the committee said.
Future OCR decisions will depend on further data on the speed of New Zealand's economic recovery, with potential for further reductions if medium-term inflation pressures continue to ease, it added.
Finance Minister Nicola Willis said falling interest rates are good for growth, businesses, jobs and Kiwis paying off their mortgages.
"The latest reduction means the OCR has now fallen from 5.5 percent to 3 percent in just a year," Willis said, welcoming the bank's decision to respond to a difficult second quarter of the year with more stimulus. ■
