It is a key number that will help define where borrowing rates reside on average; key numbers for borrowers including investors who are not just interested in current borrowing costs, but where they might sit over a decade.
The neutral OCR is where the Reserve Bank neither has the foot on the accelerator or the brake. It is also unobservable. We do not know what the number is. Think of it as the number we need to keep inflation around 2 per cent on average. We experienced decades of low inflation, so