Interest rate reductions on consumer loans from New Zealand banks were pretty moderate yesterday in the wake of the cut in the official cash rate to 3.5 per cent from 5.0 per cent. Westpac, for example, cut its floating rate to 6.89 per cent from 7.49 per cent previously.ANZ-National, Westpac and Kiwibank also cut their floating mortgage rates below seven per cent, but still by less than half the level of the RBNZ rate cut.SBS cuts its floating rate by 75 basis points to 6.45 per cent, the largest cut announced so far.There were also plenty of cuts in fixed-term loans that have dominated mortgage finance in New Zealand this decade.There's no news yet on reductions in business lending rates.On the liability side Marac Finance was the one financial institution to cut term deposit rates, cutting a number of its rates by 100 to 150 bps. In a media briefing yesterday to explain the change in monetary policy the RBNZ governor, Alan Bollard, called on banks again to pass on lower wholesale interest rates to consumers and businesses to "play their part" in reviving the economy. Bollard conceded he would not direct banks to set certain rates, adding: "This isn't the Muldoon era".He also argued the banks had complex balance sheets and faced increased funding costs from overseas, but it was still appropriate for them to pass on cuts in wholesale rates.Interest.co.nz