RBNZ Delivers Another 25bps Rate Cut as Expected

2025-05-28 02:28 By Czyrill Jean Coloma 1 min. read

The Reserve Bank of New Zealand lowered its official cash rate (OCR) by 25 bps to 3.25% at its May 2025 policy meeting, in line with market expectations and marking the lowest borrowing costs since August 2022.

This move followed a similar 25 bps cut in April, along with larger 50 bps reductions in October, November, and February.

In its monetary policy statement, the central bank noted that inflation remains within its 1%–3% target range and affirmed that the board is well placed to respond to domestic and international developments to maintain price stability over the medium term.

However, the board warned that recent developments, such as the US tariffs and policy uncertainty in the international economy are likely to weigh on global demand, particularly from Asia, posing a downside risk to New Zealand’s export sector and broader domestic growth outlook.

The RBNZ now projects the cash rate will be lowered to 2.92% in Q4 2025 and further to 2.85% in Q1 2026.



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