RBNZ cuts interest rates by 25 basis points, as expected

(Sharecast News) - The Reserve Bank of New Zealand cut interest rates on Wednesday by 25 basis points to 2.25%, as widely expected, but signalled the easing cycle was coming to an end. The Committee voted 5 to 1 in favour of the cut.

The Bank said in a statement: "The case for a further reduction in the OCR emphasised significant excess capacity in the economy

"This provides confidence that medium-term inflation will return to, and remain around, the target midpoint. The economic recovery is at an early stage, and the inflation outlook provides scope to place more emphasis on avoiding unnecessary volatility in output and employment.

"With this context, retention of the easing in overall monetary conditions delivered to date would support an enduring recovery in economic activity."