RBI Cuts Repo Rate to 5.25% as Inflation Cools and Growth Outlook Strengthens 
Kazakhstan Central Bank Holds Interest Rate at 18% as Inflation Pressures Persist 
Fed Officials Split as Powell Weighs December Interest Rate Cut 
RBA Signals Possible Rate Implications as Inflation Proves More Persistent 
UK Raises Deposit Protection Limit to £120,000 to Strengthen Saver Confidence 
New RBNZ Governor Anna Breman Aims to Restore Stability After Tumultuous Years 
Germany’s Economic Recovery Slows as Trade Tensions and Rising Costs Weigh on Growth 
BOJ’s Noguchi Calls for Cautious, Gradual Interest Rate Hikes to Sustain Inflation Goals 
Oil Prices Rise as Ukraine Targets Russian Energy Infrastructure 
Oil Prices Slip as Russia-Ukraine Peace Hopes Fade and Oversupply Fears Grow 
BOJ Faces Pressure for Clarity, but Neutral Rate Estimates Likely to Stay Vague 
Fed Rate Cut Odds Rise as December Decision Looks Increasingly Divided 
Asian Currencies Steady as Markets Await Fed Rate Decision; Indian Rupee Hits New Record Low 
Australia’s Economic Growth Slows in Q3 Despite Strong Investment Activity 
New Zealand’s economy contracted more than expected in the second quarter of 2025, intensifying pressure on the Reserve Bank of New Zealand (RBNZ) to deliver a sharper rate cut next month. Official data released Thursday showed gross domestic product (GDP) fell 0.9% quarter-on-quarter, compared with forecasts of a 0.3% decline from both analysts and the central bank.
The economy has now contracted in three of the past five quarters, signaling persistent weakness. Annual GDP dropped 0.6%, against expectations of flat growth, highlighting the depth of the slowdown. The construction industry remained in decline, while manufacturing output and professional services also posted losses.
Markets quickly priced in steeper monetary easing. Two-year swap rates slid 10 basis points to 2.7290%, their lowest since early 2022. The New Zealand dollar fell 0.5% to $0.5932, retreating from an overnight peak of $0.6007. Investors now anticipate 58 basis points of cuts to the official cash rate (OCR), compared with 48 basis points before the data. Odds of a 50-basis-point cut in October have climbed to 20%.
Westpac senior economist Michael Gordon noted that the weaker-than-expected GDP outcome would “encourage the RBNZ in its intentions to cut the OCR further this year.”
The central bank had already signaled two more rate cuts in 2025, pointing to sluggish household and business spending, rising essential costs, falling employment, and weakening house prices. New Zealand slipped into a technical recession in late 2024 before posting sluggish growth in early 2025, leaving policymakers under pressure to revive demand.
With the latest figures underscoring deeper-than-expected economic stress, markets and analysts increasingly expect the RBNZ to act more aggressively to support growth.
