New Zealand Cuts Interest Rates in Line with Expectations

The (RBNZ) announced on Wednesday a cut to its official cash rate, signaling its readiness for further easing to support economic growth amid headwinds from weakening demand and rising trade barriers in global markets.

The bank announced its decision to reduce the key interest rate by 25 basis points to 3.5 percent, stating in the minutes of its meeting that the Monetary Policy Committee saw the cut as consistent with the central bank’s goal of maintaining price stability and keeping inflation at low and stable levels.

In a statement, the central bank added, “The recently announced increases in global trade barriers are weakening the outlook for global economic activity. These developments pose downside risks to the outlook for economic activity and inflation in New Zealand.”

It is worth noting that the Reserve Bank of New Zealand is the first central bank in the Asia-Pacific region to hold a monetary policy review meeting since U.S. President Donald Trump announced sweeping tariffs on imports from all countries last Wednesday, which came into effect today.