Category Archives: Official Cash Rate

Official Cash Rate decisions made by the Reserve Bank of NZ

OCR Slashed to 1%

Today the Reserve Bank slashed the Official Cash Rate from 1.50% to 1%. This is the lowest rate in NZ’s history.

Swap rates which largely determine fixed interest rate pricing moved substancially.  The 5 year swap rate declined by 11% to 1.06%.

Variable and fixed interest rates for borrowers should fall as a result depending on how much is passed on to borrowers by the Banks.

OCR Held @ 1.50%

The Reserve Bank held the OCR at 1.50% today but cited “….weaker global economic outlook and the risk of ongoing subdued domestic growth, a lower OCR may be needed over time to continue to meet our objectives.”

OCR Cut to 1.50%

The Reserve Bank has today cut the OCR from 1.75% to 1.50% citing “continuing house price softness in some areas” which means in Auckland.

It seems unlikely that the 4 main Banks will pass on the full 0.25% cut to their floating interest rate borrowers.

OCR on hold for longer….

The Reserve Bank has today kept the OCR @ 1.75%.

Of interest was the lengthening of the period that it could remain at this low level. “”We expect to keep the OCR at this level through 2019 and into 2020″”

Swap rates, the drivers of fixed interest rates, have declined today as a result.

FED and RBNZ Leave Rates on Hold

The Reserve Bank today left the Official Cash Rate (OCR) unchanged at 2.0 percent.  The Fed Funds rate in the USA was also left unchanged.

Our Governor indicated that on current projections the Cash Rate will need to fall further to ensure inflation gets up to the middle of the target range.

ANZ passes on 0.05 of 0.25% cut in the OCR

The ANZ, NZ’s largest Bank, has passed on to its floating rate borrowers a measly 0.05 of the 0.25% cut in the OCR this morning.

After announcing the cut Reserve Bank Governor Graeme Wheeler commented: “We would like to see most of (the OCR cut) passed on.”

In the OCR announcement there is a bias toward a further cut.

Cash Rate Unchanged @ 2.25%

The Reserve Bank today left the Official Cash Rate unchanged at 2.25 percent.  There is a bias towards further cuts with the statement “Further policy easing may be required “.

The Auckland housing market got about as strong a warning as it gets from a Reserve Bank with “Auckland house prices in particular are at very high levels….”.

Cash Rate Unchanged

The Reserve Bank today left the Official Cash Rate unchanged at 2.25 percent. The housing market was mentioned as has regularly been the case of recent times.

“”There are some indications that house price inflation in Auckland may be picking up. House prices remain at very high levels and additional housing supply is needed. Housing market pressures are building in some other regions””

Keeping a wary eye on what is happening in Australia given that the large lenders here are all Aussie owned it was interesting to note that yesterday Westpac Australia announced it has stopped lending to foreign property buyers and non – residents. The bank also said it was tightening lending requirements on Australian citizens and permanent visa holders who depended on overseas income, reducing the maximum amount it will lend on property to 70 per cent.

Cash Rate Cut to 2.25%

This morning the Reserve Bank updated us with their view of interest rates and the economy which resulted in a cut to the Official Cash Rate to 2.25%. A change in the OCR results in movements in our home loan floating interest rates. As such all of the banks are likely to reduce their floating or variable rates today. Of course for existing customers this reduction will be future dated so the banks can squeeze a few more days on a higher rate out of their customers.