BNZ is reducing its six month, 18 month and two year fixed rates. Photo: RNZ / Nate McKinnon
More banks have moved their interest rates ahead of the Reserve Bank's official cash rate decision this week.
BNZ said on Tuesday it would reduce a number of its fixed-term rates.
Its six-month rate drops by 10 basis points to 4.89 percent, its 18-month rate by 26 basis points to 4.49 percent and its two-year fixed rate by 10 basis points to 4.65.
Its three-year rate will drop to 4.85 percent.
Earlier, Kiwibank said it would cut its one year rate to 4.49 percent, which matches the rate offered by the other big banks.
Its two-year fixed rate will drop to 4.69 percent and its three-year to 4.99 percent.
Kiwibank economists said a stimulatory official cash rate was needed to encourage businesses to take on more risk, either by investing or hiring.
It was also necessary if households' discretionary spending was to increase, they said.
They said an OCR of 2.5 percent was closer to what was needed. "The risks are towards a 2 percent cash rate, in our opinion."
They said it was clear that the OCR would drop at least to 2.5 percent by Christmas but how it got there was not certain.
Sign up for Money with Susan Edmunds, a weekly newsletter covering all the things that affect how we make, spend and invest money.
