75-point OCR cut needed to aid economy stuck in rut, fund manager says [Video]

• Greg Smith of Devon Funds calls for a 75-basis-point cut to the Official Cash Rate.
• Smith cites dire economic data, rising unemployment, and risks from China’s uncertain growth outlook.
• Economists Stephen Toplis and Mark Smith support a more measured approach, expecting a 50 basis-point cut.

By Gyles Beckford of RNZ

Like a dog with a bone, investment manager Greg Smith of Devon Funds refuses to give up on a call for a jumbo-sized cut to the Official Cash Rate (OCR) at the Reserve Bank of New Zealand’s last meeting of the year, due to take place in a couple of weeks.

He made the same bold call for a 75-basis-point cut for the recent October decision, only to be confounded by the RBNZ’s 50-basis-point cut to 4.75%.

Smith is not deterred that he’s swimming against the tide, which overwhelmingly backs a more modest 50-basis-point reduction.

“A general comment by dissenters to a cut of such magnitude is that such large reductions are generally reserved for extreme circumstances,” he said.

“It …