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ASB Bank, which operates in New Zealand and is owned by Commonwealth Bank of Australia, now foresees the Reserve Bank of New Zealand (RBNZ) cutting the overnight cash rate (OCR) or the benchmark interest rate by 75 basis points to -0.5% by early 2021. 

The forecasts for deeper rate cuts has come a week after the central bank delivered a more dovish than expected monetary policy and raised its large-scale asset purchase program (LSAP) to $100 billion. 

The OCR is currently held at a record low of 0.25%. The central bank has a dual mandate of maintaining price stability or a moderate inflation and a solid and efficient financial system. 

Interest rates were reduced sharply to record lows in the first half of this year to counter the coronavirus-induced financial market instability and recession fears.