Reserve Bank of New Zealand Cuts Official Cash Rate by 50 Basis Points to 4.75%

The Reserve Bank of New Zealand cut its Official Cash Rate by 50 basis points to 4.75% in its October 2024 Monetary Policy Review, delivering an accelerated easing step as policymakers noted that annual consumer price inflation was back within the 1 to 3% target band and economic activity was subdued.

The decision followed an earlier 25 basis point cut.

POLICY OUTLOOK

The 50 basis point cut to 4.75% still leaves the OCR at a level the Committee described as 'still restrictive'. The RBNZ's October record said future changes to the OCR would depend on the Committee's evolving assessment of the economy, and the committee did not commit to a specific path or quantum for future adjustments.

The RBNZ's decision was published through its Monetary Policy Review and summary record of meeting on 9 October 2024. The Committee's communication emphasised that keeping annual consumer price inflation within the 1 to 3% target band, converging on the 2% midpoint, remained the primary objective and that the pace of future cuts would be calibrated accordingly.