The ASB is cutting some interest rates after increasing them last week.
The bank says it is responding swiftly to movements in the wholesale funding market and reducing its home loan fixed-interest rates.
The new rates are effective from Tuesday and include reductions of between 0.25% and 0.35% in fixed rate loans.
The ASB was the only bank to raise interest rates last week and the reduction brings it back into line with competitors.
However, its actions also reflect global worry about American and European economies, which could put downward pressure on interest rates worldwide.