WELLINGTON, Aug 20, 2025 (BSS/AFP) - New Zealand's central bank on Wednesday cut its benchmark interest rate to a three-year low, seeking to inject momentum into the country's "stalled" economy.

The Reserve Bank of New Zealand lowered the official cash rate by 25 basis points to 3 percent, a mark not seen since September 2022.

"New Zealand's economic recovery stalled in the second quarter of this year," the bank said in a statement.

"Spending by households and businesses has been constrained by global economic policy uncertainty, falling employment, higher prices for some essentials, and declining house prices."

Stinging US tariffs had so far had little impact on New Zealand's imports or exports, the central bank said.

Finance Minister Nicola Willis said New Zealand appeared to be through the worst of an inflation crisis felt around the world.

"I know many families are still doing it tough, but the Reserve Bank's view is that we are through the worst of it and the economy is starting to pick up," she said in a statement.