Big rate cut coming next week, say ASB economists

ASB economists are predicting a 1 percentage point cut to official interest rates next week.

Reserve Bank Governor Alan Bollard is set to look at rates next Thursday, March 12. He will also be releasing a "Monetary Policy Statement", a quarterly review of what the bank is thinking about the economy, especially future growth and inflation rates

If the ASB economists are correct and Bollard cuts the OCR by 100 basis points, it would mean a fall from 8.25 per cent to 2.5 per cent in less than a year.

A publication written by the bank's economists issued today says they expect the 1 per cent cut next week "on back of further deterioration in the global economic outlook."

Forecasts for global growth continue to be revised down and ongoing pessimistic data point to further downside risk," said ASB chief economist Nick Tuffley.

To read the full NZ Herald story click here

Posted: 6 Mar 2009

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