As recently inferred the Reserve Bank has cut the Official Cash Rate by 0.25 points to 1.5 percent, an all-time low. This is the first change in the OCR since September 2016 when it dropped to 1.75 percent, where it has remained until now.
The Reserve Bank has decided that a lower OCR is necessary to support the employment and inflation outlook, and provides a more balanced outlook for interest rates.
In the announcement yesterday the bank said the current global economic outlook was uncertain, and highlighted a slow-down in global and domestic growth since mid to late 2018. Inflationary pressure is expected to rise slowly.
The Monetary Policy Committee noted that with lower mortgage rates and easing of loan-to-value restrictions, any potential acceleration in the housing market could support household spending growth more than anticipated.
ANZ and Kiwibank have already announced they will be lowering their mortgage rates slightly.
Read more on the Reserve Bank website.