Survey: The Reserve Bank of New Zealand is expected to cut interest rates by 25 basis points to 3% on August 20th.

A Reuters survey shows that the Reserve Bank of New Zealand is expected to cut interest rates to 3% on Wednesday to support the economy amid controlled inflation and a weak labor market. The central bank kept rates unchanged at 3.25% in July citing recent inflation risks, but indicated it may ease monetary policy if price pressures ease. However, the second-quarter unemployment rate rose to 5.2%, the highest since the end of 2020. This, along with widespread economic weakness, is likely to prompt the central bank to cut rates to support economic recovery. A Reuters survey conducted from August 11 to 14 showed that over 90% of polled economists expect the Reserve Bank of New Zealand to lower the official cash rate by 25 basis points to 3% on August 20. Two other economists expect rates to remain unchanged.