Reserve Bank of NZ Defends Caution on Interest Rates in Annual Report

The Reserve Bank of New Zealand (RBNZ) has defended its decision to keep the official cash rate as high as 5.25 percent, easing just 25 basis points in August, despite several other countries making more significant cuts. The U.S. Federal Reserve slashed interest rates by 50 basis points in September, bringing its cash rate to between 4.75 and 5 percent. Also in September, the Bank of Canada, the European Central Bank (ECB), the Swiss National Bank, and Sweden’s Riksbank all lowered monetary policy rates. The ECB now has an official cash rate (OCR) of 3.50 percent, Switzerland is at one percent, and Sweden at 3.25 percent....