In December 2008 Reserve Bank governor Alan Bollard announced a 1.5 point lowering of the official cash rate (OCR) – the biggest single shift since the system was introduced in 1999.The OCR has a flow-on impact on mortgage interest rates so it attracts a great deal of attention. Commercial banks borrow cash overnight from the Reserve Bank at a rate 25 basis points (.25%) above the OCR, and this rate is reflected in the amount they charge borrowers for loans.
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