NZ central bank cuts borrowing cost

New Zealand's central bank has cut the cost of borrowing to try to reduce the economic impact of the earthquake in Christchurch, the country's second largest city.

The Reserve Bank of New Zealand cut the key interest rate by half a percent to 2.5%.

The central bank's move is aimed at cushioning an economy that was just starting to emerge from a recession.

Sujatha Santhanakrishnan from the Economist Intelligence Unit told the BBC the earthquake could cost up to 8% of New Zealand's GDP.

  • Published
  • Section
    BBC News