PHOTO: ROBERT KITCHIN/STUFF The Reserve Bank released its latest quarterly monetary policy statement on Wednesday.

The Reserve Bank has slashed the official cash rate to a fresh record low of 1 per cent saying there was a need for further monetary stimulus to meet its inflation and employment objectives.

The cut is larger than the 0.25 per cent cut that had been widely expected by analysts and ASB reacted within minutes, announcing its variable home loan rate would fall by 0.5 per cent to 5.20 per cent on August 14 for new customers, with existing customers getting the benefit a week later.

The Reserve Bank’s monetary policy committee said recent economic developments were “broadly as expected and employment was around the targeted maximum sustainable level”.