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When the Reserve Bank Governor reviews interest rates there's always the usual will-he won't-he debate. But in the wake of the Christchurch earthquake, today's decision to cut rates down to 2.5% was always going to be more closely watched, more hotly debated, and somehow, more significant.
At heart today's cut - the first since April 2009 - isn't about inflation, which is of course the Reserve Bank's primary focus.
And no one is really arguing that it will do much to improve the lot of grieving, quake-stricken Cantabrians, either. It's about confidence.
Governor Alan Bollard called today's cut a "pre-emptive" move because so much is still unclear. But inevitably the economic impact of the Christchurch quake will be felt well beyond the Canterbury region and the knock to confidence will be registered in sectors that are not directly impacted by the quake itself.
The BNZ's survey last week confirmed that business confidence plummeted to a two-and-a-half year low following the quake and it's not hard to see why.
The arrival of sustained economic recovery has long been heralded but was still yet to arrive when the earthquake struck. It has now been set back at least six months.
Depending on whose predictions you look at, the quake will wipe around 2% off the country's growth rate this year.
Many people in the Canterbury region, which accounts for 10-15% of the country's total gross domestic product (GDP), are sifting through the debris. They can't even enter their damaged homes or businesses.
Pre-quake struggles
The existing pre-quake economic backdrop is also a factor in today's decision.
If growth hasn't already been so tepid, odds are the Reserve Bank would not have cut interest rates today.
Dominick Stephens from Westpac contrasts New Zealand's situation with that across the Tasman after the Queensland floods.
"The floods in Queensland actually create a risk of rate hikes and there's been a flood tax put on so a tightening of fiscal policy," he said.
But here, consumer spending, the housing market, business investment - basically most data you care to look at outside of the commodity export sector - were weak. So the threat of rapidly rising core inflation was negligible and gave the bank breathing room for a cut.
For now.
But look a little further out and, as the rebuild gets underway, inflation will inevitably rear its head.
A project as big as rebuilding the bulk of the country's second-largest city will face significant supply constraints and that obviously has an impact on prices.
The Reserve Bank expects to see four times the usual level of construction in Christchurch, which will of course boost growth, but also inflation.
So while rates are lower now, it's likely they will eventually have to rise faster in order to contain inflation.
Although the Governor points out that the migration of mortgage holders to floating rates does mean its interest rate changes don't take as long to filter through. Therefore "you can do it a little later and a little less than would have been the case some years ago".
Symbolic
On the AMP Business programme this morning I asked Stephens if a cut is implemented in order to shore up confidence, whether it becomes merely symbolic.
His response was that symbolism is important when you're talking about confidence.
And he has a point.
Without confidence, consumers don't spend.
Without it, businesses don't invest.
Confidence is an intangible, difficult to quantify, yet crucially important component of economic growth.
That's why the Governor will be hoping today's move will do something to give homeowners, consumers, investors and businesses alike something to feel confident about.
