The Reserve Bank of New Zealand has cut the Official Cash Rate to 1.5 percent, this was a 50/50 call prior to the meeting. The NZD plunged lower in immediate response.
The key points in the RBNZ statement and full monetary policy statement are:
1. OCR cut by 0.25% to 1.50%.
2. Committee reached decision to cut by consensus (first meeting of new committee)
3. Committee reached a consensus that a lower path for the OCR over the projection period was appropriate
4. Members agreed given weaker domestic spending, and projected growth and employment headwinds, there was a need for further monetary stimulus
5. Key downside risk was a larger than anticipated slowdown in global economic growth, particularly in China and Australia
6. On balance, the committee was more concerned about a continued global slowdown rather than a faster recovery
7. Committee noted upside and downside risks to the investment outlook
8. Was agreed that the outlook for employment growth is more subdued and capacity pressure is expected to ease slightly in 2019
The next OCR decision will be held on the 6th June.
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