Hon Nicola Willis
Minister of Finance

The reduction in the Official Cash Rate (OCR) affirms the work done by the Government to bring public spending back under control, Finance Minister Nicola Willis says.

The Reserve Bank today reduced the OCR by 25 basis points, meaning the rate has come down 200 basis points since August last year.

“That is good news for households because it means lower mortgage rates and more money in people’s pockets to help with the cost of living,” Nicola Willis says.

“For example, for someone with a $500,000 mortgage over 25 years, a two percentage point drop in their interest rate reduces their repayments by about $300 a fortnight.

“The fall in the OCR is also good news for businesses because it means more money flowing through their tills.

“The Government knows many families and businesses are still doing it tough but our focus on stopping wasteful spending has made a difference.

“When the Government is disciplined with its spending, it takes the heat out of inflation and gives the Reserve Bank more room to reduce interest rates.

“Since peaking at 7.3 per cent in June 2022, the annual inflation rate has fallen to 2.2 per cent.

“The OCR is now down to 3.5 per cent. By contrast, the OCR rose from 1.75 per cent when the previous government took office to 5.5 per cent when it left office.

“Increasing global uncertainty will present further challenges to the economy in coming months, but New Zealanders can be assured this Government will continue to act in a fiscally prudent manner while putting a premium on stability and certainty and promoting pro-investment policies.

“Now more than ever, we need to ensure we get value for every dollar of public money spent.”

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