Economists not expecting next week’s OCR cut to be the last

Some banks have already dropped mortgage interest rates in anticipation and suggest further cuts could be on the cards.  

The BNZ is expecting the RBNZ to signal a decent chance of an OCR cut to 2.75% in its Monetary Policy Statement (MPS) at next week’s review.

BNZ research head Stephen Toplis says while he can see the argument for taking a more cautious approach especially if the Monetary Policy Committee (MPC) feels it does not want to push an incoming new governor into a corner, equally, an admission that even more work than a 2.75% low might be required is plausible.

While 2.75% is the BNZ’s central forecast for the OCR low, he says the odds of 2.5% are marginally higher than a 3% stall.