KEY POINTS:
There was nothing of the Grinch about governor Alan Bollard today.
He delivered the deepest cut ever in the official cash rate - 150 basis points or six times normal - foreshadowed further cuts to come, and publicly leaned on the banks to pass the easing on.
With the OCR now at 5 per cent it is expansionary but also still high enough to give him a lot more ammunition by way of future rate cuts than any of his international peers.
The decision, which in the end was fully anticipated by the financial markets, was predominantly a response to the international situation which has worsened dramatically since the last monetary policy statement in September.
Uncertainty about the depth and duration of the global recession inevitably overhangs the bank's forecasts.
The forecasts imply, somewhat tentatively, that the New Zealand economy has technically already emerged from a shallow recession.
But with consumer spending expected to remain weak until at least the second half of next year and unemployment to rise to around 6 per cent it won't feel like much of an improvement.
And further quarters of negative growth next year are "quite possible" the bank says.
