New Zealand PM Urges More Aggressive Rate Cuts as RBNZ Trims OCR to 3%

New Zealand Prime Minister Christopher Luxon pushed for bolder monetary easing ahead of the Reserve Bank's decision to cut the Official Cash Rate by 25 basis points to 3%, the lowest since 2021. The 4-2 vote revealed divisions within the central bank as inflation concerns linger.

Luxon confirmed discussing economic strategy with RBNZ Governor Christian Hawkesby, stating "Pretty much, yes" when asked if he advocated stronger action. The unusual public commentary tests New Zealand's strict central bank independence protocols, echoing ECB President Christine Lagarde's recent warnings against political interference in monetary policy.

The pause in July's rate cuts gave way to renewed easing as policymakers gained clarity on inflation trajectories and confronted signs of economic contraction. Hawkesby's assessment paints a uneven recovery picture across regional economies, suggesting further rate reductions to 2.5% may be warranted by year-end.