RBNZ sees limited pass through to deposit rates, says 'something has definitely changed in the housing market'
The Reserve Bank of New Zealand (RBNZ) has raised the Official Cash Rate to 2.75% to combat inflation, with Governor Anna Breman signaling that further hikes are likely but timing remains uncertain. The bank emphasizes a flexible, data-driven approach to monetary policy.
Why it matters
Central bank policy decisions are the primary lever for controlling national inflation and economic stability, affecting all sectors of the economy.
As the Reserve Bank (RBNZ) hikes the Official Cash Rate for the second monetary policy review in a row, Governor Anna Breman says it’s likely there will be a further increase but the timing is highly uncertain.
On Wednesday, the Official Cash Rate (OCR) was raised to 2.75% from 2.50% with the Monetary Policy Committee (MPC) deciding gradually removing monetary stimulus was necessary to reduce inflation to the RBNZ’s 2% inflation target midpoint and support growth and employment.
As of the June quarter, inflation as measured by Statistics NZ's Consumers Price Index, was 4.1%, NZ's highest annual inflation rate NZ since December 2023.
Speaking to reporters at a press conference following the OCR hike, Breman said the OCR track was largely unchanged from last time. What was really important, she said, was that the OCR track was not a predetermined path.
Get smarter about the news
Sign up free for a feed built around what you actually care about, Dive Deeper research on any story, and the full text of every article.
Create free accountAlready have an account? Sign in