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OCR cut almost certain: BNZ

The Reserve Bank is “almost certain” to cut the Official Cash Rate to a record new low next week, according to BNZ economists.

Monday, July 29th 2019, 12:51PM

Economists at the big-four lender believe the OCR will be slashed to 1.25% with the “door left wide open” for further cuts this year.

The economists, including Stephen Toplis and Craig Ebert, believe GDP growth will fall short of the Reserve Bank’s expectations and anticipate it will be “downhill” for the second half of the year.

In a downbeat note to the market, BNZ analysts predicted business confidence figures would “not only fall below the RBNZ’s forecasts” but would “end up lower than our relatively pessimistic predictions”.

An OCR cut next week is 90% priced in by financial markets, according to BNZ. The central bank will make its decision in next week’s MPS.

According to the economists, financial markets predict a "terminal low" OCR of 0.93%. Markets give a 30% probability rates could fall to 0.75%.

BNZ said New Zealand swap markets were starting to “toy” with the idea of a 0.75% OCR after the Reserve Bank of Australia cut rates earlier this month. Australian interest rates are expected to fall as low as 0.5%.

The BNZ economists predicted lower-for-longer rates as the RBNZ tries to get a grip on slowing growth.

“With the RBNZ likely to cut the OCR next week and retain some form of easing bias, domestic activity indicators providing little support for the RBNZ’s forecast of a pick-up in NZ growth over the second half of the year, and more RBA cuts ahead, the path of least resistance at the short-end of the NZ curve is probably towards still lower rates,” BNZ’s report added.

Tags: BNZ Lending Loan Market Mortgage Rates mortgages OCR OCR forecasts rates Reserve Bank

« Fixed rates to fall further: WestpacGeneral Finance doubles loan book »

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Lender Flt 1yr 2yr 3yr
AIA - Back My Build 6.19 - - -
AIA - Go Home Loans 8.74 7.14 6.75 6.39
ANZ 8.64 ▼7.45 ▼7.09 ▼6.95
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - ▼6.85 ▼6.49 ▼6.35
ASB Bank 8.64 7.14 6.75 6.39
ASB Better Homes Top Up - - - 1.00
Avanti Finance 9.15 - - -
Basecorp Finance 9.60 - - -
Bluestone 9.24 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Classic - 7.14 6.79 6.65
BNZ - Green Home Loan top-ups - - - 1.00
BNZ - Mortgage One 8.69 - - -
BNZ - Rapid Repay 8.69 - - -
BNZ - Std, FlyBuys 8.69 7.74 7.39 7.25
BNZ - TotalMoney 8.69 - - -
CFML Loans 9.45 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 6.79 - -
Co-operative Bank - Owner Occ 8.40 6.99 6.79 6.65
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Standard 8.40 7.49 7.29 7.15
Credit Union Auckland 7.70 - - -
First Credit Union Special - 7.45 7.35 -
First Credit Union Standard 8.50 7.99 7.85 -
Heartland Bank - Online 7.99 6.89 6.55 6.35
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.90 7.60 7.40 -
HSBC Premier 8.59 - - -
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 7.85 7.05 6.69 6.59
Lender Flt 1yr 2yr 3yr
Kainga Ora 8.64 7.74 7.35 6.99
Kainga Ora - First Home Buyer Special - - - -
Kiwibank 8.50 7.99 7.79 7.55
Kiwibank - Offset 8.50 - - -
Kiwibank Special - 6.99 6.79 6.65
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 9.00 7.65 7.25 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
SBS Bank 8.74 7.74 7.09 6.95
Lender Flt 1yr 2yr 3yr
SBS Bank Special - 7.14 6.49 6.35
SBS Construction lending for FHB - - - -
SBS FirstHome Combo 6.19 6.14 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.95 - - -
Select Home Loans 9.24 - - -
TSB Bank 9.44 7.79 7.55 7.45
TSB Special 8.64 6.99 6.75 6.65
Unity 8.64 6.99 6.79 -
Unity First Home Buyer special - 6.55 6.45 -
Wairarapa Building Society 8.60 6.95 6.85 -
Lender Flt 1yr 2yr 3yr
Westpac 8.64 ▼7.49 7.35 6.99
Westpac Choices Everyday 8.74 - - -
Westpac Offset 8.64 - - -
Westpac Special - ▼6.89 6.75 6.39
Median 8.64 7.14 6.82 6.65

Last updated: 18 July 2024 10:19am

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