New Zealand Cuts Interest Rates to 4.25% in Third Consecutive Reduction

The Reserve Bank of New Zealand lowers rates by 50 basis points as inflation cools and economic growth remains subdued.

The Reserve Bank of New Zealand reduced its official cash rate by 50 basis points to 4.25%, the lowest level since November 2022.
This marks the third rate cut since August, with a total reduction of 125 basis points over three consecutive moves.
The central bank cited declining inflation, now near the midpoint of its 1-3% target range, as a key factor enabling the rate cuts.
Economic activity in New Zealand remains subdued, with GDP contracting for four consecutive quarters and output below potential levels.
Further rate cuts are anticipated in early 2025, as the central bank predicts economic recovery and stronger investment during the year, though employment growth is expected to remain weak until mid-2025.