Interest rate cut may be further out
The Real Estate Institute’s latest survey shows, most lending institutions cut their one to five year fixed rates in the past month, some even after Bollard’s March 6 Monetary Policy Statement.
ASB Bank, for example, cut its four-year rate on Saturday from 7.10% to 6.95% and its five-year rate from 7.15% to 6.95%. On Tuesday, National Bank made identical cuts to its four and five-year rates.
Westpac economist Nick Tuffley says Bollard didn’t want to destroy rate cut expectations so much, but to postpone them.
The central bank "is inching towards a rate cut but it still hasn’t reached the threshold yet – if anything, there was a little bit of over-anticipation leading into the statement," Tuffley says.
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