Bollard axes rates - 1pc cut

The Reserve Bank has slashed official interest rates an unprecedented 1 percentage point to 6.5 points, opening the way for cuts to mortgage rates but also highlighting the grim outlook facing the global economy.

"Ongoing financial market turmoil and a deteriorating outlook for global growth have played a large role in shaping today's decision," bank Governor Alan Bollard said.

As a result of international developments, economic activity in this country would be even further constrained than the bank was expecting just last month, Dr Bollard said.

"New Zealand can expect to face lower demand for exports and credit is likely to be less readily available."

To read the full NZ Herald story, click here

Posted: 23 Oct 2008

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