New Zealand central bank cuts cash rate by 25 bps to 5.25%
WELLINGTON, Aug 14 (Reuters) -New Zealand's central bank cut the cash rate by 25 basis points to 5.25% on Wednesday as inflation was now converging on its target band of 1% to 3%.
The decision was in line with market pricing but defied most economists' expectations, with 19 of 31 economists in a Reuters poll having forecast the Reserve Bank of New Zealand (RBNZ) to hold rates steady as they have since May 2023.
This is the first time the central bank has cut the official cash rate since March 2020.
"The pace of further easing will depend on the committee's confidence that pricing behaviour remain consistent with a low inflation environment, and that inflation expectations are anchored around the 2% target," the statement said.
Reporting by Lucy Craymer; Editing by Himani Sarkar
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