Be aggressive Bollard, says BNZ economist

Reserve Bank Governor Alan Bollard / Photo Mark Mitchell

The BNZ wants the Reserve Bank to send a strong signal to the market that it is prepared to be aggressive in cutting interest rates.

The market is divided between whether Reserve Bank Governor Alan Bollard will trim the official cash rate by 0.25 or 0.5 per cent when he reviews interest rates on Thursday.

BNZ senior economist Craig Ebert says a 50 basis point cut seems the clearest way to back up the more general message of lower rates for longer.

"We think it should not only cut 50 points but accompany that with words along the lines of 'and there may well be some further easing depending on how the data pan out.'"

Ebert says any perception the Reserve Bank is done with its easing cycle puts at risk the dollar being pushed higher.

- NEWSTALK ZB