Wellington, July 24 NZPA - Kiwibank, which has led other markets down with interest rate cuts this year, said today it would not immediately cut rates again as a result of the Reserve Bank cut of official rates.

The Reserve Bank surprised markets with its first rate cut in five years, taking the Official Cash Rate down a quarter of a percentage to 8 percent.

Kiwibank spokesman Bruce Thompson said the state-owned bank had essentially anticipated the Reserve Bank's move today with its earlier cuts.

However, Reserve Bank Governor Alan Bollard has indicated there would be further cuts ahead.

Analysts believe other banks will be hard pressed to cut rates because they fund much of the lending on international markets, which have tightened drastically as a result of the global credit crisis.

Kiwibank, however has the advantage that it funds purely on the domestic market and with many finance companies failing, investors have been heading to the relative safety of the Government-owned bank.

On July 3, Kiwibank cut its key three-year rate to 8.79 percent, citing strong growth in deposits to fund lending.

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