Official Cash Rate slashed by 1.5%

The Reserve Bank today reduced the Official Cash Rate (OCR) from 6.5 percent to 5.0 percent.

The banks who have moved in advance of the cut the past couple of weeks are now likely to revisit their home loan interest rates, with further cuts to floating and short term fixed interest rates possible.

For the first time that i can remember the Governor also provided a stab at the banks with the following.

“To ensure the response we are seeking, we expect financial institutions to play their part in the economic adjustment process by passing on lower wholesale interest rates to their customers.”

Hear, Hear.! 

Aussie cuts their interest rates by 1%

The RBA in Australia has today cut rates by a full 1%. This is the 4th cut in as many months and equates to 3% in cuts since September.

CBA Bank, announced immediately they were passing on the full 1% to customers.  CBA is the owner of ASB Bank, Sovereign and Bank Direct here in New Zealand.

Our Reserve Bank has some catching up to do and we are picking at least a 1% cut in our OCR on thursday.