World Economy

NZ to Cut Interest Rates

NZ to Cut Interest RatesNZ to Cut Interest Rates

New Zealand’s Reserve Bank is expected to cut interest rates on Thursday in a bid to stimulate the weakening economy. Economists say it may not be the last cut this year. Economists 3 News spoke with are all tipping a rate cut on Thursday, down a modest quarter of a percent to 3%. That’s because of low inflation and weakening demand. The Reserve Bank has an inflation target of between 1% and 3%, but it’s currently well below that, down at less than 0.5%. We’ve seen some weaker economic indicators since the rate cut last month. There have also been slumping dairy prices, a drop in consumer and business confidence and slowing demand from China.