![]() ![]() I won’t get into too much detail about how this works – you can watch the video below to learn more:īank Deposits are among the least risky places to put your money. ![]() Rate cuts hope to stimulate the economy by encouraging people to spend and invest more by decreasing cost of lending (like mortgage interest rates, to give homeowners more spending money), and decrease bank deposit and savings rates (making spending and investing more attractive). The OCR influences the economy by influencing interest rates. You can see a full history of the rate here. There was a big rate cut this month (August 2019) from 1.50% to 1.00% and the downward slope isn’t over yet, with short-term forecasts suggesting a further OCR cut may be on the cards later this year. Five years ago, the OCR was at 3.50%, and it has been on a downward slope since then. The Reserve Bank has been cutting rates over their concern about slowing economic growth both domestically, and globally.
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