FX.co ★ New Zealand PM Presses RBNZ for Deeper Rate Cuts

New Zealand’s Prime Minister, Christopher Luxon, has expressed dissatisfaction with the Reserve Bank's recent approach to monetary policy, specifically critiquing the bank for not reducing the Official Cash Rate (OCR) more aggressively to invigorate the economy. The central bank's recent adjustment brought the OCR down by 25 basis points to 3%, a decision that narrowly passed with a 4-2 vote against a more substantial 50 basis points cut. This action followed a gradual reduction from 5.5% since August of the previous year. In a local media interview, Luxon suggested that the board should have taken bolder steps in response to the economic stagnation. The unemployment rate rose to 5.2% in June, leaving 158,000 individuals jobless, and Luxon characterized the recovery as “two-speed,” with urban regions trailing behind more robust regional growth. He emphasized that there are still two OCR reviews scheduled before Christmas, hinting at potential for further monetary policy actions.