July 08 OCR decision: Rates cut to 8.0%
Posted July 24, 2008on:
So the Reserve Bank cut interest rates to 8.0%.
The only new information that has come out since June is a higher inflation outcome as a result of larger than expected increases in petrol and food prices. Furthermore recent increases in funding costs have helped to convince the Bank to cut.
Even ignoring inflation, it appears that the Reserve Bank values the livelihood of those who have mortgages above people who are struggling to pay their food and fuel bills (which will go up, as a lower exchange rate will increase the New Zealand price of both).
Good Bloomberg piece here.
More discussion to come later (the additional discussion has now appeared).