The OCR Was Cut 0.25% - What's The Big Deal? Official Cash Rate | RBNZ MPS August 2024

The Reserve Bank of New Zealand (RBNZ) just cut the Official Cash Rate (OCR) by 0.25%, now sitting at 5.25%. In this video I discuss the change, how it could affect you, and where the top economists and banks expect the OCR to change to over the remainder of 2024. The Official Cash Rate is an interest rate set by the Reserve Bank of New Zealand (RBNZ). It\'s the rate at which the central bank lends money to registered banks like ANZ, ASB, Westpac, Kiwibank, or BNZ for example. The OCR is a tool used by the RBNZ to control inflation and influence the economy. When the official cash rate is high, borrowing becomes more expensive, which can slow down spending and help cool inflation. Alternatively, a low rate makes borrowing cheaper, encouraging spending and investment, which can stimulate economic growth. The OCR is a key factor in driving interest rates in New Zealand, such as mortgage rates and term deposit rates. On August 14th, 2024, the RBNZ decided to cu