New Zealand central bank cuts cash rate by larger-than-expected 50bps

WELLINGTON, Oct 8 (Reuters) – New Zealand's central bank surprised some in the markets by slashing its benchmark rate by 50 basis points to 2.50% on Wednesday, suggesting policymakers were worried about the frail state of the economy and stood ready to act decisively. The decision went against 15 of 26 economists surveyed in a Reuters poll who had forecast the Reserve Bank of New Zealand would cut the official cash rate by 25 basis points. However, the larger cut wasn't totally unexpected as the remaining 11 economists had picked a 50-bp reduction and markets were primed for the RBNZ to pull harder on its monetary policy levers to inject impetus to a weakened economy. The central bank has cut rates by 300 basis points since August 2024, and with inflation within its target band of 1% to 3%, policymakers have leeway to lower borrowing costs further. (Reporting by Lucy Craymer Editing by Shri Navaratnam)

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