New Zealand central bank cuts cash rate by larger-than-expected 50bps

WELLINGTON, Oct 8 (Reuters) - New Zealand's central bank surprised some in the markets by slashing its benchmark rate by 50 basis points to 2.50% on Wednesday, suggesting policymakers were worried about the frail state of the economy and stood ready to act decisively.

The decision went against 15 of 26 economists surveyed in a Reuters poll who had forecast the Reserve Bank of New Zealand would cut the official cash rate NZINTR=ECI by 25 basis points.

However, the larger cut wasn't totally unexpected as the remaining 11 economists had picked a 50-bp reduction and markets were primed for the RBNZ to pull harder on its monetary policy levers to inject impetus to a weakened economy.

The central bank has cut rates by 300 basis points since August 2024, and with inflation within its target band of 1% to 3%, policymakers have leeway to lower borrowing costs further.