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Investing.com - The Reserve Bank of New Zealand (RBNZ) is expected to cut its Official Cash Rate (OCR) by 25 basis points to 3.00% on August 20, according to Bank of America (NYSE:BAC).
The anticipated rate cut comes in response to weak domestic growth, a fragile labor market, and global growth headwinds, Bank of America noted in its forecast. The 25 basis point reduction is widely expected by market participants.
The main focus for investors will likely be the RBNZ’s updated OCR projection rather than the cut itself. Bank of America predicts a small downward revision of approximately 10 basis points to the OCR track, with a projected trough of 2.75%.
Despite the expected downward adjustment to its rate path, the RBNZ will likely emphasize data dependency in its communication following the decision. The central bank is expected to keep its options open for further cuts depending on economic developments.
The rate decision will be announced on August 20, marking what would be the latest monetary policy adjustment by New Zealand’s central bank as it navigates challenging economic conditions both domestically and globally.
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