FX.co ★ New Zealand Cuts Rate by 25bps as Expected

The Reserve Bank of New Zealand decreased its official cash rate (OCR) by 25 basis points to 3.50% during its April 2025 policy meeting, meeting market expectations. This follows earlier reductions of 50 basis points in the October, November, and February sessions. This decision brings borrowing costs to their lowest point since October 2022, in response to potential global economic disruptions stemming from the ongoing trade war. The board observed that annual inflation remains near the midpoint of the 1 to 3% target range, while core inflation is aligning to sustain this target over the medium term. Despite higher-than-anticipated export prices and a weaker exchange rate bolstering primary sector incomes and overall economic growth, household spending and residential investment have shown weakness. Nevertheless, the emerging global trade barriers present downside risks to New Zealand's economic activity and inflation outlook.