The Reserve Bank has cut its benchmark cash rate by 50 basis points.
The central bank cut the official cash rate to 4.75%, as expected, to its lowest level in 18 months, saying the bigger than usual rate cut was justified by slowing inflation and the slack in the economy.
“The Committee agreed that it is appropriate to cut the OCR by 50 basis points to achieve and maintain low and stable inflation, while seeking to avoid unnecessary instability in output, employment, interest rates, and the exchange rate,” the Monetary Policy Committee (MPC) said in a statement on Wednesday.
It said the speed and size of future rate cuts would be determined by economic data.
Retail banks have been quick to cut lending rates in anticipation of the big-sized cut.
More to come
