Kiwibank's rate cut is positive sign for economy

A cut to standard variable mortgage rates by Kiwibank is a good sign that New Zealand's economy may be turning around, reports The Australian Financial Review.

The bank announced yesterday it is reducing its rates by 14bps to 5.65%.

The rate cut follows a report by PricewaterhouseCoopers which announced last week that banks were "emerging from the gloom of the recession".

Competition, regulation and bad debts combined to plague New Zealand's economy.

New Zealand's cash rate sits at 2.5% and no movement is expected until later this year.