Australian OCR Cut to 3%

April 7, 2009 International FinanceNew Zealand Finance  No comments

The Australian Official Cash Rate (OCR) has been cut to 3% on the 7th of April, although it was preceded with less certainty than in previous times.

Even while according to a Reuters poll of 21 economists only 13 thought that an OCR decrease was likely, it has been cut by 25 basis points to 3%. According to a Reserve Bank of Australia media statement, the Australian economy is shrinking (albeit not as fast as some of its trading partners), as such the newest cut is warranted.

Similar action is looking increasingly likely after the same day publication of the Quarterly Survey of Business Opinion (QSBO) by the New Zealand Institute of Economic Research (NZIER). The New Zealand OCR cut would seem warranted, or at least called for, due to the new information showing 47% of firms reporting a fall in their business activity, as opposed to last December’s 44%.