Adrian Orr, Governor of the Reserve Bank of New Zealand, stated that the bank has begun a cycle of interest rate cuts and plans to gradually lower interest rates to a more neutral level. Yesterday (14th), the central bank announced a quarter-point rate cut to 5.25%, and predicted that the mid-2027 interest rate would fall to a neutral level of 3%.
Orr stated that he hopes to achieve a neutral interest rate level in a cautious and gradual manner to ensure that inflation expectations remain at the target level of 2%. Although the current economy is weak, expansion is expected to begin from the end of this year to next year, so no further stimulus measures are needed.