reverse its rate hike, particularly those introduced on home loans. Accordingly, the bank slashed its one-year, 18 month and two-year mortgage rates by 0.10 to 0.14 per cent, while long-term rates will continue to remain unchanged.
“Although ANZ got a bit ahead of themselves by lifting rates before the Reserve Bank announcement occurred, I’d suggest this is a relatively limited window for borrowers to lock in lower fixed rates than they might otherwise have had access to by now,” Gareth Kiernan, the chief forecaster at Wellington-based economic consultant Infometrics, said. He also expressed his confidence that interest rates will track upwards, particularly in terms of wholesale rates, once the lockdown restrictions get the current COVID outbreak under control.
Meanwhile, analysts continue to insist that the Reserve Bank will proceed with increasing the OCR in the near future. According to Kiwibank economists, it would take extended, “Australian-type”, lockdown avoid an OCR increase in October. “We hope the lockdown is short, and we hope we’re in a position for the Reserve Bank to remove stimulus,” they said.
Announcing the central bank’s decision to leave the OCR at 0.25 per cent last week, Governor Adrian Orr noted that the lockdown measures had not shifted the apex bank “at all” from the broad path of reducing monetary stimulus. Instead, it had “given time for ‘pause’ while we observe, like everyone else does, the outcomes of the next few days and weeks”.
