By James Glynn

SYDNEY -- The Reserve Bank of New Zealand lowered interest rates Thursday, becoming the first central bank to respond to heightened global market volatility in the wake of Donald Trump's unexpected U.S. election win.

The RBNZ's benchmark interest rate now sits at a record low of 1.75%, down from 2.0%. The move was expected by all 10 economists surveyed by The Wall Street Journal.

RBNZ Gov. Graeme Wheeler made it clear he is worried about market instability and U.S. political upheavals, saying they could trigger further rate cuts.

"Political uncertainty remains heightened and market volatility is elevated," Mr. Wheeler said.

"Numerous uncertainties remain, particularlyin respect of the international outlook, and policy may need to adjust accordingly."

The rate cut was well telegraphed to markets, with the RBNZ frustrated that consumer prices have refused to respond to repeated interest-rate cuts this year. Still, some economists said that the U.S. political shift would cement the case for lower rates.

Donald Trump became the U.S. president-elect Tuesday, surprising pollsters who had widely predicted Hillary Clinton would instead be heading to the White House.

Write to James Glynn at james.glynn@wsj.com

(END) Dow Jones Newswires

November 09, 2016 15:49 ET (20:49 GMT)

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