Reserve Bank of New Zealand has cut official interest rates

Reserve Bank of New Zealand has cut official interest rates by a quarter of one per cent, to eight per cent - the first drop in five years.

The bank says the cut is justified by a rapidly slowing New Zealand economy, despite strong inflationary pressures which is expected around 5% in the September quarter.

The Reserve Bank governor, Alan Bollard, says further interest rate falls are likely.

Maybe Reserve Bank of Australia will follow it's counterpart's example soon?