- Hon Nicola Willis
Falling interest rates are good for growth, businesses, jobs and Kiwis paying off their mortgages, Finance Minister Nicola Willis says.
The Reserve Bank announced today that it was reducing the Official Cash Rate (OCR) from 3.25 to 3 per cent and signalled two further reductions this year.
"The latest reduction means the OCR has now fallen from 5.5 per cent to 3 per cent in just a year," Nicola Willis says.
"I welcome the bank's decision to respond to a difficult second quarter of the year with more stimulus.
"Lower interest rates support businesses to expand and grow, support increased construction activity, create jobs and put more money in people's pockets.
"The falling OCR means repayments on a 25-year $500,000 floating mortgage are about $330 less a fortnight today than they were a year ago.
"That makes a big difference to the family budget and, as more mortgages come up for refinancing, more households will benefit. About 40 per cent of fixed mortgages are due to come up for repricing in the next six months.
"I know many families are still doing it tough, but the Reserve Bank's view is that we are through the worst of it and the economy is starting to pick up.
"The Government's responsible economic management is making a difference.
"Taking the pressure off inflation has allowed the Reserve Bank to lower the OCR when it needs to be adjusted."
