Though the classic 25 basis point move had been expected by some, today the Reserve Bank of New Zealand lopped 50 basis points off its official cash rate taking it down to a new record low of 1.00 per cent. It was as recently as May this year that they trimmed 25 basis points to take it to the then record low of 1.5 per cent. A particularly terse statement noted: ’’The MPC agreed that a lower OCR is necessary to continue to meet its employment and inflation objectives’’. Sovereign bond yields and the currency both dropped swiftly on this news.
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