Official Cash Rate in New Zealand
The Official Cash Rate ended 2022 at 4.25%, up from the 0.75% end-2021 value and higher than the reading of 2.50% a decade earlier. For reference, the average policy rate in Asia-Pacific was 3.70% at end-2022. For more interest rate information, visit our dedicated page.
New Zealand Interest Rate Chart
Note: This chart displays Policy Interest Rate (%) for New Zealand from 2015 to 2014.
Source: Macrobond.
New Zealand Interest Rate Data
2019 | 2020 | 2021 | 2022 | 2023 | |
---|---|---|---|---|---|
Official Cash Rate (%, eop) | 1.00 | 0.25 | 0.75 | 4.25 | 5.50 |
90-Day Bank Bill (%, eop) | 1.23 | 0.26 | 0.91 | 4.53 | 5.63 |
10-Year Bond Yield (%, eop) | 1.65 | 0.99 | 2.37 | 4.48 | 4.38 |
Central Bank decides to leave rates unchanged in July
At its meeting on 10 July, the Central Bank decided to maintain the Official Cash Rate at 5.50%.
A further rate hike was not warranted given that inflation is expected to return to the target range in the second half of this year and that labor market pressures have eased. However, it was premature to begin cutting rates, as inflation remains well above the Bank’s 1.0–3.0% target range.
The Central Bank provided no specific forward guidance on the future level of interest rates, only stating that monetary policy will need to remain restrictive. Most of our panelists expect the Bank to cut rates by year-end, though several see rates unchanged.
ANZ Bank analysts commented on the timing of rate cuts: “The RBNZ’s acknowledgement of the recent softer data confirm they are willing to reassess their medium-term inflation outlook. However, it was always a high bar to signal very much more than that […] given [upcoming data for]CPI could move their assessment in either direction. The clear acknowledgement of emerging downside momentum means the risks around our call for cuts from February skew a little bit more towards November, but at the end of the day the data will decide.” In a similar vein, Goldman Sachs analysts said: “The attending statement was dovish, noting restrictive monetary policy has 'significantly' reduced inflation and that the level of restrictiveness 'will be tempered over time consistent with the expected decline in inflation pressures.' […] From our perspective, while we had expected the statement to be incrementally dovish, the extent of changes increases the risk that the RBNZ will start cutting at its next meeting in August. Our base case is for the RBNZ to start cutting in November 2024.”
How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects New Zealand interest rate projections for the next ten years from a panel of 15 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts and averaged to provide one Consensus Forecast you can rely on for each indicator. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable interest rate forecast available for New Zealand interest rate.
Download one of our sample reports to visualize what a Consensus Forecast is and see our New Zealand interest rate projections.
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