RBNZ Cuts to 3% and Signals More

New Zealand’s central bank cut its benchmark interest rate on Thursday to counter headwinds posed by tumbling dairy prices and stubbornly low inflation, and said more easing was coming due to a weakening economic outlook.

The Reserve Bank of New Zealand cut its official cash rate (OCR) by 25 basis points to 3.0 percent, delivering its second cut in as many months and sending the domestic currency sharply higher.

“A reduction in the OCR is warranted by the softening in the economic outlook and low inflation,” RBNZ Governor Graeme Wheeler said in a statement. “At this point, some further easing seems likely.”