BNZ and Kiwibank Urge Immediate OCR Cut Amid Economic Decline

With New Zealand's economy showing signs of distress, BNZ and Kiwibank are calling for an immediate cut to the Official Cash Rate (OCR) ahead of the Reserve Bank's upcoming Monetary Policy Statement. Kiwibank's chief economist, Jarrod Kerr, highlights the ongoing recession, rising unemployment, and struggling housing market as key factors justifying a rate cut. BNZ's head of research, Stephen Toplis, echoes this sentiment, warning that a delay could lead to unnecessary economic volatility. Despite these calls, Westpac and ANZ expect the Reserve Bank to hold the OCR at 5.5% this week, possibly delaying rate cuts until October or November. The Reserve Bank is also likely to revise its OCR track for 2025 and 2026, considering persistent non-tradable inflation and the need for caution in forecasting economic conditions.

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