Reserve Bank OCR cut August 2025

The story so far

The Reserve Bank was expected to cut the Official Cash Rate by 25 basis points at its August policy announcement, while economists were divided on the inflation outlook and the pace of recovery.^{18 Aug 2025} The decision followed a split committee vote between a 25 and a 50 basis point cut.^{20 Aug 2025} The cut was expected to lower home loan rates and could lift consumer confidence and property sales before Christmas.^{20 Aug 2025}

Latest

Prime Minister Christopher Luxon has publicly criticised the Reserve Bank's gradual approach to OCR cuts.^{25 Aug 2025}

Key moments

1. 18 Aug 2025Reserve Bank expected to cut OCR by 25 basis points this week
2. 20 Aug 2025OCR cut to 3 per cent, a three-year low, after split vote
3. 20 Aug 2025Cut expected to lower home loan rates and boost confidence
4. 25 Aug 2025Luxon criticises gradual OCR cuts and says he shared views with Governor

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