New Zealand’s central bank yesterday slashed interest rates to a record low of 1 percent, warning that the economy faced rising headwinds.
It did not rule out a further reduction later this year, saying that stimulus was necessary to meet employment and inflation targets.
The surprise cut in the official cash rate to 1 percent, from a previous low of 1.5 percent set in May, had an immediate impact on the housing market, with mortgage rates falling while the New Zealand dollar dropped to US$0.6435.
Many analysts had tipped a 25 basis-point cut.
Employment was close to its maximum sustainable level, inflation was below the 2 percent midpoint of the target range and “growth headwinds are rising,” the Reserve Bank of New Zealand (RBNZ) said.
“In the absence of additional monetary stimulus, employment and inflation would likely ease relative to our targets,” the bank said in a statement.
The bigger-than-expected cut “does not rule out any further action” later in the year, RBNZ Governor Adrian Orr said.
New Zealand Prime Minister Jacinda Ardern said that the decision brought the country’s official cash rate in line with Australia, adding that it was positive news for homeowners.
“We are in an environment where unemployment is low, we see wages are increasing and this cut will ultimately mean New Zealanders should face lower interest rates,” she said.
The bank noted that a number of central banks worldwide were easing monetary policy in the face of a weakening global economy.
“Global long-term interest rates have declined to historically low levels, consistent with low expected inflation and growth rates into the future,” the bank said. “In New Zealand, low interest rates and increased government spending will support a pickup in demand over the coming year.”
India’s central bank yesterday joined New Zealand with bigger-than forecast rate cut, as New Delhi battles sluggish economic growth and high unemployment.
The Reserve Bank of India (RBI) cut interest rates for the fourth time this year, bringing the benchmark repo rate — the level at which it lends to commercial banks — 35 basis points lower to 5.4 percent, the lowest level since 2010.
“The monetary policy committee was of the view that a 25 basis-point rate cut was inadequate due to evolving global economic conditions, while a 50 basis-point cut would be excessive,” RBI Governor Shaktikanta Das told reporters. “Hence, 35 basis points was viewed as a balanced level of cut due to the current circumstances.”
All 36 economists surveyed by Bloomberg News had predicted that the RBI would cut rates by 25 basis points.
A fall in domestic demand last quarter lowered India’s growth rate to 5.8 percent, with unemployment at its highest since the 1970s.
“Domestic economic activity continues to be weak, with the global slowdown and escalating trade tensions posing downside risks,” the RBI said in a statement.
The RBI revised down its growth projection for the current fiscal year from 7 percent to 6.9 percent, saying that the global economy has been losing pace.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last
US CONSCULTANT: The US Department of Commerce’s Ursula Burns is a rarely seen US government consultant to be put forward to sit on the board, nominated as an independent director Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, yesterday nominated 10 candidates for its new board of directors, including Ursula Burns from the US Department of Commerce. It is rare that TSMC has nominated a US government consultant to sit on its board. Burns was nominated as one of seven independent directors. She is vice chair of the department’s Advisory Council on Supply Chain Competitiveness. Burns is to stand for election at TSMC’s annual shareholders’ meeting on June 4 along with the rest of the candidates. TSMC chairman Mark Liu (劉德音) was not on the list after in December last