At its 13 March monetary policy meeting, the Reserve Bank of New Zealand (RBNZ) raised the official cash rate (OCR) to 2.75% from 2.50%, where it had rested since March 2011. The markets had broadly expected the Bank's move. In its statement, monetary authorities noted that New Zealand's economic expansion, “has considerable momentum and growth is becoming more broad-based,” and added that, “the extended period of low interest rates and continued strong growth in construction sector activity have supported recovery.” Moreover, the Bank underlined that the rapid increase in immigration over the past 18 months has provided a boost to housing and private consumption. Regarding price developments, the Central Bank underlined that although the strong exchange rate has helped to keep inflation low, “inflationary pressures are increasing and are expected to continue doing so over the next two years.” Although the RBNZ did not explicitly signal another increase in April, monetary authorities stated that increases in the monetary policy rate are likely in the coming months and that the OCR may rise by a total of 125 basis points this year. Accordingly, the majority of FocusEconomics panelists expect the Bank to raise the Official Cash Rate this year, with an average forecast of 3.45%. For 2015, participants see interest rates ending the year at 4.00%.
New Zealand Monetary Policy
Reserve Bank of New Zealand raises OCR
March 13, 2014
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New Zealand Monetary Policy Chart
Note: Official Cash Rate (OCR) in %.
Source: Reserve Bank of New Zealand.
New Zealand Economic News
October 19, 2016
In Q3, consumer prices edged down from the quarter-on-quarter seasonally-adjusted 0.4% increase observed in Q2 to 0.2%.
September 30, 2016
Economic sentiment among New Zealand businesses rebounded in September after declining for two consecutive months.
September 22, 2016
At its meeting held on 22 September, the Reserve Bank of New Zealand (RBNZ) decided to keep the Official Cash Rate (OCR) at 2.00%.
September 19, 2016
New Zealanders’ confidence rose in Q3 after having deteriorated in the previous two quarters.
September 15, 2016
GDP grew a seasonally-adjusted 0.9% over the previous quarter in Q2, which matched the result tallied in Q1.