New Zealand's central bank cuts benchmark rate by 25 bps to 3.25%

In this sixth consecutive cut, the central bank confirmed that there will be further rate cuts, but it may not be as soon as being widely expected.

The bank foresees official cash rate (OCR) at 3.12 per cent in September 2025 and 2.87 per cent in June 2026, 2.9 per cent in September 2026 and 3.1 per cent in June 2028.

It projects annual consumer price index-based inflation at 1.9 per cent by June 2026.

The bank’s monetary policy committee said inflation is within the target band and core inflation is declining. There is spare capacity in economy, which is well placed to respond to domestic and international developments.

Conditions are consistent with inflation returning to the mid-point of the 1 to 3 per cent target band over the medium term, it noted.

ALCHEMPro News Desk (DS)