New Zealand skyline

New Zealand Monetary Policy February 2019

New Zealand: RBNZ leaves OCR unchanged in February

At its first meeting of the year, held on 13 February, the Reserve Bank of New Zealand (RBNZ) left the official cash rate (OCR) unchanged at a record-low of 1.75%, where it has been since November 2016. The decision was widely in line with analysts’ expectations and marked the sixth monetary policy meeting incorporating the broadened mandate of both supporting maximum sustainable employment and achieving price stability.

The RBNZ remarked that low underlying inflation and a tight labor market signaled that businesses have not yet passed on cost increases to consumers and also noted that the recent minimum wage hike is likely to add further pressure on firms. An accommodative OCR is therefore key to pushing core inflation towards the 2.0% target and ease the cost burden on business. In turn, employment should remain near the maximum sustainable level.

On its forward-looking guidance, the RBNZ maintained a dovish tone, prioritizing a pick-up in economic activity and further labor market tightening, and expects the OCR to remain unchanged through 2019 and 2020. The Bank, however, did add that the “next OCR move could be up or down”, as a volatile international backdrop could weigh on the outlook.

The next monetary policy meeting is scheduled for 27 March.

Free sample report

Access essential information in the shortest time possible. FocusEconomics provide hundreds of consensus forecast reports from the most reputable economic research authorities in the world.
Close Left Media Arrows Left Media Circles Right Media Arrows Right Media Circles Arrow Quote Wave Address Email Telephone Man in front of screen with line chart Document with bar chart and magnifying glass Application window with bar chart Target with arrow Line Chart Stopwatch Globe with arrows Document with bar chart in front of screen Bar chart with magnifying glass and dollar sign Lightbulb Document with bookmark Laptop with download icon Calendar Icon Nav Menu Arrow Arrow Right Long Icon Arrow Right Icon Chevron Right Icon Chevron Left Icon Briefcase Icon Linkedin In Icon Full Linkedin Icon Filter Facebook Linkedin Twitter Pinterest