RBNZ cuts OCR by 50 bps - but 'hawkish' statement

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RBNZ cuts OCR by 50 bps - but 'hawkish' statement

As expected the RBNZ cut the OCR to 4.75%, but noted that expected further weakness in global and domestic data has been built into this decision. That includes the expectation of further downward revisions in international Consensus forecasts and a reduction in domestic growth to 1.5% over the next year.

The RBNZ will consider further rate cuts only if the situation weakens beyond those assumptions.

With such a high hurdle, we would put the probability of another cut during this cycle at no more than 30%.

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