The Reserve Bank of New Zealand (RBNZ) has cut the Official Cash Rate (OCR) by 25 basis points to 3.25%.

 In doing so the bank has cut rates for the sixth consecutive meeting by a cumulative 225 basis points since August last year.

 This latest cut was widely predicted by economists following a commitment by the central bank earlier this year to continue lowering the rate through 2025.

 The RBNZ’s Monetary Policy Committee said in a statement today (28 May) that the New Zealand economy was "recovering after a period of contraction" and that conditions were consistent with “inflation returning to the mid-point of the 1 to 3% target band over the medium term".

"Recent developments in the international economy are expected to reduce global economic growth. Both tariffs and increased policy uncertainty overseas are expected to moderate New Zealand’s economic recovery and reduce medium-term inflation pressures. However, there remains considerable uncertainty around these judgements," the committee said.

"Inflation is within the target band, and the committee is well placed to respond to domestic and international developments to maintain price stability over the medium term," it said.

Meanwhile, banks started to cut their interest rates ahead of the expected OCR cut. BNZ moved yesterday (27 May), offering a 4.95% rate for one year and two years and 4.89% for 18 months.

This morning just before the announcement, ANZ was offering app users 4.89% for one year, 4.85% for 18 months and 4.92% for two years.

Raine & Horne New Zealand Supervision and Compliance Manager, James Shepherd said the latest rate cut would add to growing confidence that the property market was firmly in recovery mode and that median national property values would continue to increase in the second half of the year.

 Whether you want to buy, sell or rent a property, don’t hesitate to contact your local Raine & Horne office.