RBNZ cuts rates as tariffs loom, economists expect more stimulus

Lucy Craymer - Reuters - 09/04
New Zealand's central bank cut its benchmark rate on Wednesday, as widely expected, signalling a greater readiness to lower borrowing costs further as the economy faces headwinds from weak demand and trade barriers.
  • RBNZ cuts rates for fifth straight meeting
  • Future policy decisions to be determined by inflation outlook
  • Says as tariff impact becomes clearer, has scope to lower rates as appropriate
  • Economists see possibly looser settings than previously forecast
  • New Zealand dollar rises 0.3% to $0.5550
WELLINGTON, April 9 (Reuters) - New Zealand's central bank cut its benchmark rate on Wednesday, as widely expected, signalling a greater readiness to lower borrowing costs further as the economy faces headwinds from weak demand and trade barriers.
The Reserve Bank of New Zealand (RBNZ) is the first in the region to conduct a policy review since the U.S. imposed sweeping import tariffs last week, causing global markets to spiral as policymakers grapple with heightened recession risks.

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The central bank cut the benchmark rate by 25 basis points to 3.50%, as widely expected, heightening economists' expectations for looser policy settings than previously expected.
In minutes of the meeting, the Committee agreed that a 25 basis point reduction in the official cash rate (OCR) would be consistent with their mandate of maintaining low and stable inflation.
"The recently announced increases in global trade barriers weaken the outlook for global economic activity. On balance, these developments create downside risks to the outlook for economic activity and inflation in New Zealand," the RBNZ said.
"As the ...
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