By 3 News online staff
The drop in the official cash rate today has Opposition parties saying the Government is failing to manage the economy properly.
The Reserve Bank cut the OCR by .25 percent this morning bringing it to 3 percent. It is the second consecutive drop, having previously been unchanged since September last year.
Governor Graeme Wheeler has hinted at further cuts this year, with some economists guessing the interest rate could reach as low as 2 percent.
Labour, the Greens, and New Zealand First say the change shows how bad the economy actually is.
Labour's finance spokesman Grant Robertson believes the bank's decision to lower the OCR and thereby putting pressure on the Auckland housing market "just shows how serious New Zealand's worsening economic outlook is".
"The recent drop in iron ore prices and the economic calamity that resulted in Australia should serve as a warning to our government of the consequence the dairy price collapse will have in New Zealand. Yet the current government is content to sit on its hands and let the economy drift into recession," he says.
Green Party co-leader James Shaw says the Reserve Bank trying to stimulate the economy by dropping the OCR fills in the "absence of any long-term plan for economic resilience from National".
He hopes the lower interest rates will "kick-start investment in the productive economy" in the face of falling dairy prices, a slowing Canterbury rebuild, and low business and consumer confidence.
"National's lack of long-term economic thinking means short-term jolts are felt more sharply throughout the economy," he says.
Winston Peters says it's "too little too late" with today's OCR drop, and believes a 50-basis point cut was needed.