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Reserve Bank of New Zealand Cuts OCR to 4.75% Amid Economic Concerns
In a bid to address New Zealand’s struggling economy, the Reserve Bank of New Zealand (RBNZ) has lowered the Official Cash Rate (OCR) from 5.25% to 4.75% .
This marks the second cut in recent months, following an August reduction to 5.25%. The previously high OCR led to soaring mortgage rates, stifling consumer spending and business investment. With the cut, the RBNZ hopes to stimulate economic activity, providing relief to households and businesses burdened by rising costs.
Many economists and industry leaders had criticized the RBNZ’s stringent monetary policies for contributing to an economic downturn. High mortgage rates triggered by the elevated OCR left many homeowners and businesses with reduced spending power, slowing down economic circulation. The recent cut aims to address these issues and encourage a more favorable borrowing environment.
As New Zealand navigates its path to economic recovery, this cut signals the RBNZ’s intent to pivot towards fostering growth while still keeping inflation under control. The impact of these changes will be closely monitored as the economy adjusts to the new cash rate.
SOURCE: RBNZ