Overview

• The Reserve Bank of New Zealand reduced the Official Cash Rate by 25 basis points to 3.00%, a three‑year low.
• Updated projections show the OCR at 2.71% in Q4 2025 and around 2.59% by September 2026, with inflation seen returning to the 2% midpoint by mid‑2026.
• Minutes recorded a 4–2 vote for a 25bp move, with two committee members favoring a 50bp cut after debating options of 0, 25 or 50 basis points.
• The bank said the domestic recovery stalled in Q2 and flagged spare capacity and cautious household and business behavior, even as it noted a near‑term risk of CPI touching 3% in the September quarter.
• Governor Christian Hawkesby told lawmakers that policy uncertainty tied to new tariffs, including a 15% U.S. levy on New Zealand goods, has dampened confidence and slowed transmission, and the NZ dollar fell about 1.2% as markets priced more easing.