The Bank of New Zealand has reduced its variable housing rates by 50 bps and its 6 month fixed rate by 45 bps.

Tim Main, Treasurer at BNZ says;

"Since the global financial crisis, the average cost of bank funding, particularly deposits and term wholesale funding, has been continually increasing. Regulatory changes are requiring all banks to hold more expensive, but more stable forms of funding. BNZ will need to take account of these costs when adjusting lending rates in the future.

"For now however, rebuilding Christchurch and supporting confidence more broadly in the economy is extremely important, and BNZ has no hesitation in passing on today's rate cut by the Reserve Bank."