Finance minister Nicola Willis said banks should pass on as much as possible. Photo: Nick Monro
Finance Minister Nicola Willis has urged banks to slash their home loan rates by passing on "as much as possible" of the latest cut to the official cash rate (OCR).
Banks began dropping floating rates on Wednesday after the Reserve Bank cut the OCR by 25 basis points, as expected, to 2.25 percent, the lowest since June 2022.
Speaking in Auckland on Thursday, Willis said the Reserve Bank would monitor how banks responded to the OCR cut, but she hoped it would flow through to mortgage-holders.
"My message to the New Zealand banks is a very clear one: pass on as much as possible," she said.
"When you do, that makes a significant difference to our economy. And actually, as some of New Zealand's biggest businesses, you have a stake in this economy. So pass those rates on."
In its forecasts released on Wednesday, the central bank said the risks for inflation were "balanced".
Willis told reporters she expected the economy to pick up and inflation to come down even more next year, meaning a real difference to the cost-of-living.
"Conditions are going to get easier for a lot of New Zealand workers and families," she said.
"All of the data and indicators I'm seeing tell me that next year will be a lot better."
Willis accepted people were under "no obligation" to believe her analysis until they started feeling the improvement for themselves.
"New Zealanders have been very resilient," she said. "Your efforts are not in vain... we have better times ahead of us."
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