The bank has also dropped its two-year fixed term mortgage rate by 20 basis points to 7.49 per cent and its three-year fixed term rate by 14 basis points to 7.35 per cent, while its special mortgage rates will see a 20-basis-point cut on the two-year rate to 6.89 per cent and 14-basis-point cut on its three-year rate to 6.75 per cent.
Meanwhile, ASB’s economists have brought forward their forecast for the first OCR cut to August 2024, six months earlier than their previous view.
“We think the recent GDP release was significant: it showed momentum in the economy is grinding to a halt more rapidly than anticipated,” they said.
“We expect weakness will continue into 2024. If it does, inflation pressures are likely to reduce quicker than we had been previously thinking.Although current headline inflation is still high, we are also seeing encouraging signs in recent monthly pricing data that show inflation is falling slightly quicker than the RBNZ had recently been expecting.”
Swap rates have fallen sharply in recent weeks on the expectation that central banks will soon start cutting their cash rates.
The Reserve Bank of New Zealand left the official cash rate unchanged at 5.5 per cent on November 29 and warned that inflation remained too high and monetary policy would remain restrictive.
The central bank’s forecast interest rate track suggested no rate cuts were on the horizon until mid-2025.
Last month Westpac became the first major bank to cut mortgage rates.
The ANZ spokeswoman said its interest rates would continue to be reviewed in response to international and local market conditions.
“When reviewing interest rates we consider a range of factors, including the impact on customers, the underlying cost of funds (including wholesale rate movements) and competitor activity.”
