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RBNZ CUT Official Cash Rate by 0.25% - NZD Lower

The RBNZ have cut the Official Cash Rate (OCR) at 1.50% - this was a 50/50 call prior to the meeting.

The key points in the RBNZ statement and full monetary policy statement are:
OCR cut by 0.25% to 1.50%.

Committee reached decision to cut by consensus (first meeting of new committee)
Committee reached a consensus that a lower path for the OCR over the projection period was appropriate

Members agreed given weaker domestic spending, and projected growth and employment headwinds, there was a need for further monetary stimulus
Key downside risk was a larger than anticipated slowdown in global economic growth, particularly in China and Australia

On balance, the committee was more concerned about a continued global slowdown rather than a faster recovery

Committee noted upside and downside risks to the investment outlook
Was agreed that the outlook for employment growth is more subdued and capacity pressure is expected to ease slightly in 2019

The NZD plunged lower in immediate response.

The next OCR decision will be held on the 6th June.

Below is link to the RBNZ press release:

https://www.rbnz.govt.nz/news/2019/05/official-cash-rate-reduced-to-1-5-percent

Current indicative levels are:

NZD-USD 0.6550 / 0.6575
NZD-AUD 0.9345 / 0.9370
NZD-EUR 0.5850 / 0.5875
NZD-GBP 0.5010 / 0.5035
NZD-JPY 72.15 / 72.40

ends

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