All eyes were on the Official Cash Rate (OCR) announcement earlier this week. The Reserve Bank (RBNZ) has taken a ‘steady as she goes’ approach: keeping the OCR at 5.5%, continuing to suggest there is a chance the rate could rise, and pencilling in the first cut for mid-2025. This week’s issue of Tony’s View discusses the reasons why a rise in the OCR was never on the cards.
Tony then discusses the decision and notes falls in wholesale borrowing costs which followed. Minor bank fixed rate cuts seen in the past 2-3 months are likely to continue. But big declines are still many months away.