On 14^th August 2024, the Reserve Bank of NZ announced a reduction in the Official Cash Rate from 5.5% to 5.25%. It is the first cut since March 2020.

The Reserve Bank said New Zealand’s annual consumer price inflation is returning to within the Monetary Policy Committee’s 1% to 3% target band.

Further good news for consumers regarding the Reserve Banks new forecast rate track that suggests the OCR will fall from here to at least 5% by the end of the year and to at least 4.5% by June 2025.

This is good news for Mortgage holders. Investors will also take heart as equity markets usually start to rise on the back of falling interest rates. There is still uncertainty abroad however that suggests that a bumpy ride still lies ahead for investors.

If you have a Mortgage and are looking to fix your rate in upcoming months, or are an investor considering Term Deposit or Cash Fund deposits in the same timeframe we encourage you to reach out to your Adviser for their thoughts on what strategies you might consider as we enter this new downward trending interest rate environment.