Bollard boosts confidence; floating rates slashed
Bollard cut his official cash rate (OCR) from 3% to 2.5%, taking it back to the record lows which followed the global financial crisis.
Financial markets had already priced in most of the cut and short-term wholesale interest rates fell about another 10 basis points after the decision. The New Zealand dollar fell about half a US cents initially but then recovered about half that.
Home lending banks are already cutting their floating mortgage rates, for example, ASB Bank slashing its rate from 6.2% to 5.75% and Kiwibank cutting its rate from 6.2% to 5.65%.
"Most New Zealand economists were reasonably convince they (the Reserve Bank) had to do something," says Robin Clements at UBS New Zealand who is Christchurch based.
Click the button below to subscribe and will have free unlimited access for a limited time to full article and all other articles on the site.
You will also be able to comment on articles on Good Returns.
