PHOTO: The Official Cash Rate will remain at 0.25 percent – for now. Photo credit: Supplied.
The Official Cash Rate (OCR) remains at 0.25 percent, the Reserve Bank has announced.
But economists say the record-low cash rate hasn’t hit the bottom. They expect the OCR to be cut as much as 75 basis points by mid-2021.
In a statement released on Wednesday, Reserve Bank Governor Adrian Orr confirmed the decision to leave the Official Cash Rate where it is.
“The Official Cash Rate (OCR) is being held at 0.25 percent in accordance with the guidance issued on 16 March,” Orr said in a statement.
“The Monetary Policy Committee agreed to continue with the Large Scale Asset Purchase (LSAP) Programme up to $100 billion. This action is necessary to further lower household and business borrowing rates.”
The central bank said it’s clear more stimulus will be needed. A bank funding for lending programme will be ready by the end of the year. Other policy tools it’s prepared to use include purchases of foreign assets and a negative cash rate.
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