The Reserve Bank of New Zealand (RBNZ) today reduced the official cash rate to 2.25%, a decrease of 0.25 percentage points.

Governor Graeme Wheeler said easing is justified given the weakness in export prices and the necessity to boost the country’s housing market.

New Zealand’s economic growth is expected to be supported by “strong inward migration, tourism, construction activity, and accommodative monetary policy,” Wheeler said, adding further policy easing may be required.

“There are many risks to the outlook. Internationally, these are to the downside and relate to the prospects for global growth, particularly around China, and the outlook for global financial markets,” he said, mentioning the decline in inflation expectations and pressures in the housing market as main risks arising on the local level.  

New Zealand kiwi depreciated 0.08% against the dollar, lost 0.08% versus the euro and decreased 0.05% against the British pound  (both 10:45 p.m. CET).