New Zealand's central bank cut its policy rate by 25 basis points to a three-year low of 3.00% on Wednesday, and flagged further reductions in coming months as policymakers warned of domestic and global headwinds to growth.

New Zealand's central bank has cut its policy rate by 25 basis points (bps) to a three-year low of 3%, and flags further reductions in the coming months as policymakers warn of domestic and global headwinds to growth.

ANZ, the Australian bank, said it now expected two further interest rate cuts after the dovish pivot. The New Zealand dollar fell 1.1 per cent against the US dollar to a four-month low.