Banks slash floating lending and deposit rates after 25bp OCR cut
Banks began announcing cuts to their mortgage rates immediately after the Reserve Bank cut its official cash rate (OCR) to 3.5% from 3.75%, as most economists and market pricing had predicted.
Wednesday, April 9th 2025, 3:11PM
by Jenny Ruth
Kiwibank, for example, cut its variable mortgage rates, business lending rates and its deposit rates by the same 25 basis points, BNZ cut its floating mortgage rates while ASB Bank also cut its floating mortgage, business and deposit rates by the same amount.
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“We expect our reduced variable rates will appeal to customers choosing to float their lending in part or full, as we see Kiwi considering their options carefully,” said ASB personal banking general manager Adam Boyd.
The RBNZ’s monetary policy committee (MPC) noted that while it has cut interest rates “at pace, household spending and residential investment have remained weak,” adding that increasing global trade barriers in the form of US President Donald Trump’s chaotic tariffs policies are weakening the growth outlook.
It said the tariffs on balance will likely create downside risks to inflation over the medium term but the impact on global inflation is unclear.
“As the extent and effect of tariff policies become clearer, the committee has scope to lower the OCR further as appropriate,” the MPC said.
The New Zealand dollar rose a small amount against the US dollar but almost as quickly fell back again while the wholesale interest rate markets barely moved.
ANZ chief economist Sharon Zollner said the MPC is taking a “let’s wait and see” approach to the US tariffs.
“We’re not putting tariffs on. We could even get some things dumped on us” as products originally intended for the US are diverted elsewhere, and oil prices are also falling, although such impacts have been offset by the falling NZ dollar.
| « Advisers to be educated on lending for businesses | Moving forward to the past - rates have further to fall » |
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