ANZ National cuts interest rates as big OCR cut tipped

New Zealand's largest bank, the ANZ National bank, has announced sweeping cuts to its home loan interest rates.

The cuts, which range from 0.2 per cent for two year terms, up to 0.89 per cent for five year terms, come as expectations grow of another big fall in the Official Cash Rate, when the Reserve Bank next makes an announcement on January 29.

The new rates come into effect tomorrow, January 15.

Many economists expect the Reserve Bank will cut the official cash rate by another full percentage point later this month after business confidence plunged to a 39-year low.

Economists used words like "dreadful", "terrible" and "dire" to describe the results of the New Zealand Institute of Economic Research's latest quarterly survey of business opinion.

The only good news in the survey, they said, were the indicators of inflation pressure, which have dropped sharply, suggesting there is nothing to give Reserve Bank Governor Alan Bollard pause as he contemplates the next interest rate cut.

To read the full NZ Herald story click here

Posted: 14 Jan 2009

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