ASB economist Nick Tuffley said that in view of the economic collapse in the second quarter, the Bank of New Zealand should inject more fuel into the country's economy at next Wednesday's policy meeting and cut the official overnight loan rate by 50 basis points. He added that this is not a foregone conclusion, as there are also good reasons to support a smaller 25 basis point cut in interest rates. Market conditions reflect expectations that interest rates will be cut by about 33 basis points at this meeting. He said that the fire of recovery requires more stimulus measures, and the official overnight loan rate needs to be lowered to a lower level than recently anticipated, that is, a low of 2.25%, to allow the monetary environment to enter a more relaxed range.

ASB economist Nick Tuffley said that in view of the economic collapse in the second quarter, the Bank of New Zealand should inject more fuel into the country's economy at next Wednesday's policy meeting and cut the official overnight loan rate by 50 basis points. He added that this is not a foregone conclusion, as there are also good reasons to support a smaller 25 basis point cut in interest rates. Market conditions reflect expectations that interest rates will be cut by about 33 basis points at this meeting. He said that the fire of recovery requires more stimulus measures, and the official overnight loan rate needs to be lowered to a lower level than recently anticipated, that is, a low of 2.25%, to allow the monetary environment to enter a more relaxed range.