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XE Data Update - RBNZ slashes the OCR by 0.50% to 1.00%

XE Data Update - RBNZ slashes the OCR by 0.50% to 1.00% - NZD lower

The RBNZ have cut the Official Cash Rate (OCR) by 0.50% to 1.00% - this surprised the market who were only expecting a 0.25% cut. The last time the RBNZ cut by 0.50% was in March 2011.

The key points in the RBNZ statement and full monetary policy statement are:
The committee agreed larger initial monetary stimulus would best ensure meeting inflation and employment objectives.

The lower OCR path reflected the economic projections and the balance of risks discussed.

Members noted that estimates of the neutral level of interest rates have continued to decline

Committee noted that low business confidence had dampened business investment in 2018 and had remained weak in mid-2019

Members noted that heightened global uncertainty was reducing investment and suppressing trading-partner growth

Members noted this highlighted the risk of a larger or more prolonged slowdown in global economic growth.

Committee agreed that the balance of risks to achieving inflation and employment objectives tilted to downside

The NZD plunged lower in immediate response.

The RBNZ press conference will take held at 3pm.

The next OCR decision will be held on the 25th September.

Current indicative levels are:

NZD-USD 0.6435 / 0.6460
NZD-AUD 0.9530 / 0.9555
NZD-EUR 0.5735 / 0.5760
NZD-GBP 0.5275 / 0.5300
NZD-JPY 68.25 / 69.50

ends

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