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Live: Reserve Bank speaks about OCR decision

32 mins ago

The central bank lowered the official cash rate by 25 basis points at its final decision of the year. Source: 1News (Source: Other)

The Reserve Bank has trimmed the official cash rate by 0.25% to 2.25% as inflation edges towards its target, and the economy shows early signs of recovery.

The monetary policy committee voted 5-1 in favour of the cut at its final meeting of the year, with acting governor Christian Hawkesby noting the reduction would help underpin consumer and business confidence.

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The decision came despite annual inflation sitting at 3% in the September quarter, the top of the Reserve Bank's target band, with the committee confident that significant spare capacity in the economy would see inflation fall to around 2% by mid-2026.

The OCR now sits at its lowest level since the Reserve Bank began aggressive rate hikes in 2022 to combat soaring inflation.

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