The size of Thursday's Official Cash Rate cut by the Reserve Bank will determine if banks will further reduce interest rates.
KiwiBank led the charge last month in cutting interest rates by as much as three quarters of a percent in anticipation of a drop in the OCR.
Spokesman Bruce Thompson says there is speculation among economists that the OCR could be reduced by 1-1.5%.
Meanwhile Federated Farmers is joining that chorus of people calling for the cut of 1.5%.
Economics spokesman Phillip York says it is essential - particularly in the light of the Reserve Bank of Australia's move to cut its rate to 4.25%.
York says, even with a 1.5% cut, New Zealand's interest rates will still be higher than those in Australia, which is the country's biggest export market.
He says, with farmers facing a rapid cooling in commodity prices and a potential drought over summer, the cut is needed to provide a much needed stimulus for the economy.
