11 Mar 2009

Reserve Bank OCR decision awaited

9:57 am on 11 March 2009

There is division amongst economists over what the Reserve Bank Governor will do with the Official Cash Rate on Thursday.

The ASB says continued deterioration in world markets make it likely that Dr Alan Bollard will lower the OCR by a full percentage point to 2.5%.

However, Infometrics senior economist Gareth Kiernan told Morning Report the Reserve Bank is likely to adopt a more measured approach and he expects a cut of half a point.

He said a further half point cut will then be made by June.

The current rate is 3.5%. It has been reduced from 8.25% last July.