The latest cut in the Official Cash Rate has been criticised by a business organisation which says it should have gone below 3%.
Reserve Bank Governor Alan Bollard says the rate is unlikely to fall much lower than a predicted trough of 2.5%.
But the Manufacturers & Exporters Association says the Reserve Bank has gained nothing by delaying a cut to this level.
It says 2.5% is inevitable and the bank has gained nothing by delaying this.
However Dr Bollard says a cut to near zero levels is not appropriate. He says any cut to interest rates also cuts into savings.
Dr Bollard says the New Zealand OCR is now below Australia, which is 3.25%.
The OCR was previously 3.5%. The reduction on Thursday was the sixth consecutive cut since July 2008 when the rate was 8.25%.
The new rate is the lowest since the OCR was introduced in March 1999, when it was set at 4.5%.
