Banks in New Zealand reacted swiftly to the 50-basis-point cut in the official cash rate by the Reserve Bank, with all the major banks announcing almost an equivalent drop in their floating mortgage rates within an hour of the announcement.Bank of New Zealand, ASB, Kiwibank, National Bank and Westpac all cut their floating rates by 50 basis points, while the ANZ lowered its by 46 basis points.  The banks had already lowered their fixed mortgage rates on expectations of such a cut. From the Reserve Bank of New Zealand's point of view, an immediate cut in the floating home-loan rate is the best form of transmission of its rate cut move, as most mortgages are now on floating rates. Governor Alan Bollard acknowledged this when he said that the fact that most New Zealanders are on floating or pretty close to floating means there is "quite a lot of flexibility on monetary policy."This flexibility is one of the reasons the RBNZ made the OCR cut despite uncertainty about how fast inflation would climb because of the rebuilding efforts following  the Christchurch earthquake."When the time comes to tighten we have some confidence that monetary policy will have significant traction as a result of this," Bollard said. As of January 2011, over 47 per cent of mortgages were on floating rates, exceeding the highs seen in 2000.The RBNZ didn't indicate when it expects to remove the policy accommodation, saying only that this will be done when the rebuilding phase materialises.  RBNZ's projections which it admits will undergo changes as more information becomes available, currently assume reconstruction will begin in 2012. Given the difficulty of making projections, Bollard confessed the RBNZ decided only a week prior that it would put out a forecast at all.