PHOTO: KIWIBANK FILE
The interest rate battle among retail banks intensifies as Kiwibank lowers fixed home loan and deposit rates, following a dip in wholesale rates. The state-owned bank’s latest move matches recent reductions by ANZ, New Zealand’s largest lender, while offering a competitive one-year rate of 6.29 percent.
Kiwibank has trimmed between 4 and 20 basis points across its fixed-term loans, with the six-month rate gaining popularity among borrowers anticipating further decreases. Deposit rates have also dropped by 10 to 30 basis points.
These cuts come amid falling wholesale interest rates in both New Zealand and global markets, driven by lower inflation and central banks’ moves to reduce benchmark rates.
All eyes are now on the US Federal Reserve’s upcoming decision, which is expected to kick off its rate-cutting cycle. Analysts remain split on whether the Fed will opt for a 25 or 50 basis point cut to cushion the US economy.
In New Zealand, investors are betting on significant rate reductions by the Reserve Bank (RBNZ), with forecasts suggesting the Official Cash Rate could drop by 87 basis points to 4.35 percent by year-end. However, ASB senior economist Kim Mundy warns these predictions may be overly optimistic, as future cuts will depend on the economic and inflation outlook. The RBNZ’s next rate review is scheduled for early October.
SOURCE: RNZ