Interest rates will be cut twice more this year

The Reserve Bank’s Monetary Policy Committee sounded almost ready to cut rates at its last meeting in June. And developments since then will have done little to mollify the Bank’s concerns. So we expect the RBNZ to cut rates to a record low of 1.25% when it meets on Wednesday 7th August. But the Bank is unlikely to stop there. Given the weakness in economic conditions, we expect the RBNZ will opt to cut rates once more to 1.0% before the year is out.