The Reserve Bank of New Zealand (RBNZ) announced early this morning that a 0.75% cut has been enforced. This takes our already low Official Cash Rate (OCR) of 1% down to 0.25% and will likely remain this low for at least 12 months.
The outbreak of COVID-19 has affected everything imaginable, and now travel restrictions along with self-isolation are being enforced in many countries, including here in New Zealand.
The impact of the virus to the New Zealand economy is significant and will continue to be as we are reliant on global trade and travel. Demand for our goods and services will drop and with interest rates set to fall with the OCR, spending and investment will be subdued and may remain quiet as we recover from COVID-19.
The New Zealand dollar will also drop, but the Government is committed to providing further support with fiscal packages that will stimulate the economy.
You can view the full report from the RBNZ here.