07:44 AM EDT, 10/09/2024 (MT Newswires) -- The Reserve Bank of New Zealand kicked its easing campaign into high gear on Wednesday, lowering the official cash rate by 50 bps to 4.75%, noted Bank of Montreal (BMO).

On the growth outlook, the RBNZ said "Economic activity in New Zealand is subdued, in part due to restrictive monetary policy. Business investment and consumer spending have been weak, and employment conditions continue to soften."

Regarding inflation, the bank noted that "annual consumer price inflation is assessed to currently be within the Committee's 1 to 3 percent target band and is expected to converge to the target midpoint."

Both 25bps and 50bsp cuts were discussed, with the committee ultimately seeing little reason to hold back from the larger move, stated BMO. As for the outlook, the committee "agreed that the economic environment provided scope to further ease the level of monetary policy restrictiveness, consistent with its mandate of low and stable inflation."

While a lot can happen between now and the next RBNZ policy decision on Nov. 26, it looks like more easing is on the way, perhaps even another 50bps reduction, pointed out the bank.