Finance Minister Grant Robertson says the 0.5 per cent cut to the OCR is good news for Kiwis

Finance Minister Grant Robertson painted the central bank's decision as good news for Kiwis. Photo / Mark Mitchell

The Reserve Bank's "stunning" cut to the official cash rate means it's a very good time to invest in New Zealand, according to Finance Minister Grant Robertson.

This morning, the Reserve Bank cut the official cash rate (OCR) by 50 basis points to 1 per cent – a historic low.

This is just the fourth time in New Zealand's history the OCR has been cut by 50 basis points.

The first was after the 9/11 terrorist attack, then during the global financial crisis, and again after the Christchurch earthquake.

Westpac called the decision "stunning" and said it was very surprised that the Reserve Bank would cut the OCR so significantly "in today's environment".

But Robertson is not as pessimistic.

In fact, he painted the central bank's decision as good news for Kiwis.

He said the OCR cut would improve the cost of living for many New Zealanders.

"Their mortgage rates will go down, the baked-in cost of borrowing that is in goods we purchase may well … reduce.

"It also means it's a very good time to invest in New Zealand."

National's finance spokesman Paul Goldsmith said the "dramatic" OCR cut was a warning that the economy is slowing.

He said it means the Government needed to get serious about growth.

"The Reserve Bank's cut came with the message, 'Indicators of growth remained weak or weakened further over the past few months'."

But Robertson said the fact that the Reserve Bank was slashing interest rates so dramatically was not a sign the economy was suffering.

In the OCR statement, Reserve Bank Governor Adrian Orr said GDP growth had slowed over the past year and growth headwinds are rising.

Speaking in the House this afternoon, Robertson said it was international factors, such as the economies of some of New Zealand's biggest trading partners weakening, that had forced the bank to cut.

"I note that the tone of it overall is one that says, yes, there is lower growth … That is a global trend and, indeed, that is reflected in the Governor's statement."