In a move surprising some economists, the Official Cash Rate (OCR) will at this stage remain unchanged at 2.50 percent.

Today’s review is the first in nine evaluations that the central bank hasn’t further cut the OCR.

Reserve Bank Governor Alan Bollard says the economic outlook remains weak both in New Zealand and overseas, however there are signs that international economic activity is stabilising, and international financial conditions are improving.

The New Zealand economy is expected to begin growing again toward the end of this year, but the recovery is likely to be slow, with key economic indicators such as unemployment being projected to continue deteriorating well into 2010.

Statistics New Zealand figures show unemployment rose to 115,000, or 5 percent, in March to reach its highest level in six years.

The OCR has been slashed from 8.25 percent to 2.5 percent between July 2008 and April this year. The cuts by the Reserve Bank have been suggested by some media sources as an attempt to breathe new life into a domestic economy facing the worst global economic crisis since World War II.

Mr Bollard says the OCR could still move modestly lower over the coming quarters, staying at or below the current level through until late next year.

The Reserve Bank cut the Official Cash Rate again today, slicing 50 basis points from the previous 3 percent to make today’s rate a low 2.5 %.

Reserve Bank governor Alan Bollard said developments since March pointed to lower medium-term inflation than previously projected. He believed the main contributing factors were weaker global growth and an unwarranted tightening in financial conditions due to higher long-term interest rates and a stronger exchange rate than expected.

He expected the hefty decline in the OCR over the past year to pass through interest rates to more borrowers over coming quarters as existing fixed-rate mortgages come up for re-pricing.

He said this, combined with the stimulus from fiscal policy, would support the kiwi economy, leading to activity hitting a low and then picking up. It would take some time for economic activity to return to its former glory however, given the scale of the global financial crisis and domestic adjustments underway.

It’s expected the OCR could still move modestly lower over the coming quarters.

In a bid to stimulate the economy, the Official Cash Rate has been cut again this morning to 3%. This takes it down by 50 basis points from the previous 3.5%, the third cut in less than four months.

Reserve Bank Govenor Allan Bollard has noted that the 525 basis points in which the OCR has been reduced in the last 6 months is taking interest rates to very stimulatory levels. While credit growth is easing alongside the weak economy, the RBNZ expects lenders to continue pushing financial loans through on sound business propositions, which will support the economy’s recovery.

Additionally, the changes in monetary policy settings and stimulus from fiscal policy, together with the sizeable exchange rate depreciation, will act to further support the NZ economy. Bollard hopes to see activity gradually picking up after the middle of 2009.

With the OCR at a record low of 3.5%, it’s a great time to invest in a new house as you can get a low mortgage rate, but those with savings investments get the short stick with lower interest rates. Investing definitely has its ups and downs.

Are investments ever absolutely safe? Cars and houses can depreciate, stocks can fall and businesses can have rocky times, so of course not. However, having savings in the bank is a pretty safe investment to have, and believe it or not, you can still get great, competitive interest rates. While the market average interest rate is 3.55% from the big banks in New Zealand at the moment, there are online banking services which can give you an on-call interest rate of 4.50%.

How do they do this? Online banks have no branches and no tellers, meaning smaller overheads. Smaller overheads means small margins need to be made to cover costs, so instead of contributing to a bank branch’s power bill, you get a higher interest rate (meaning more interest earnings in your account). Nice to know that in these financially challenging times you can still get a high interest rate, isn’t it?

The OCR, Official Cash Rate, has been cut for the second time in two months by another 150 base points, taking it from 5% to 3.5%.

Reserve Bank Governor Allan Bollard announced the cut this morning, which is the lowest ever since the OCR was introduced in 1999 at 4.5%.

Financial experts predict that it could drop again in coming months a further 100 points, bringing it down to 2.5%.

With interest rates now lower than ever, real estate is becoming more and more affordable, with banks already lowering their mortgage rates in anticipation of the cut. Conversely, the OCR cut is bad news for those with money in the bank who will now earn less interest on their savings.

Today the Official Cash Rate (OCR) was slashed by 150 base points (1.5%) from 6.5% down to 5% by the Reserve Bank Governor Allan Bollard.

There has been speculation over the past week with many initially expecting a drop of 100 base points. In the last few days the common expectation appeared to have shifted to a likely 150 base points which puts interest rates at a 5 year low.

The move has broken records for the largest drop since the OCR was introduced in 1999.

Banks have started to reduce their interest rates accordingly with Alan Bollard directly pushing for this outcome quickly;

“To ensure the response we are seeking, we expect financial institutions to play their part in the economic adjustment process by passing on lower wholesale interest rates to their customers.”

The Official Cash Rate of New Zealand, or OCR, has just been changed from 7.5% to 6.5%. The current world financial crisis has played a big part in the decision to do this, announced the Reserve Bank of New Zealand late this morning.The RBNZ Governor stated that owning to the current state of the financial world;

“economic activity in New Zealand will be further constrained, relative to the outlook presented in our September Monetary Policy Statement, by current international developments. New Zealand can expect to face lower demand for exports and credit is likely to be less readily available. In this environment consumers and businesses are likely to be more cautious and curtail spending.”

Looking for your New Zealand financial hub? NZS.com has just launched a New Zealand finance section, enabling you to view and compare interest rates and exchange rates by day, month and year.

Updated daily at 3.30pm courtesy of the RBNZ, NZS.com gives you a quick, easy to comprehend view of current and archive New Zealand financial data.