Retailers have welcomed the Reserve Bank of New Zealand’s decision to reduce the official cash rate to 4.75 per cent, describing it as a much-needed move to boost spending for the holiday season.
“We are delighted at the Reserve Bank’s decision to cut the OCR by 50 basis points to 4.75 per cent,” said Carolyn Young, Retail NZ CEO.
“Strong pre-Christmas sales are critical to retailers meeting their annual sales targets.”
Retail NZ expects that the rate reduction will turn around consumer confidence, which has been weak over the past years, a fact the RBNZ acknowledged in its decision.
The bank said that the country’s economy now has excess capacity, noting that lower import prices helped in the disinflation.
“The committee agreed that it is appropriate to cut the OCR by 50 basis points to achieve and maintain low and stable inflation, while seeking to avoid unnecessary instability in output, employment, interest rates, and the exchange rate,” said the Reserve Bank.