New Zealand cuts interest rates for the fifth time since June 2015

(Baonghean.vn) - In a stunning move, the Reserve Bank of New Zealand (RBNZ) has cut its lending rate for the fifth time since June last year, to a record low of 2.25%.

Bank of New Zealand Governor Wheeler announced the fifth interest rate cut in the past year. Photo: BBC.

The country's central bank had earlier signaled the possibility of further rate cuts to boost growth, saying the cut was due to concerns about global growth and lower demand from China, New Zealand's key trading partner. The New Zealand dollar lost 1% on the news.

The RBNZ last cut interest rates in December last year, from 2.75% to 2.5%. At the time, Governor Graeme Wheeler sounded optimistic about the outlook for economic growth and inflation in 2016.

However, in announcing the rate cut, Mr. Wheeler said that the global growth outlook had worsened since December due to “weaker growth in China and emerging markets, as well as slower growth in Europe.”

Mr. Wheller's announcement came ahead of a meeting of the European Central Bank on the evening of March 10. The European Central Bank is now looking to introduce stronger stimulus measures to help boost the eurozone's economic recovery.

New Zealand is the world’s second-largest dairy exporter, but the sector is facing some challenges. The Reserve Bank of New Zealand said its flagship dairy industry faced “tough challenges” but “domestic growth is expected to be supported by strong migration, tourism, construction activity and accommodative monetary policy.

Tu Linh

(According to BBC)