Latest bank decision: At its meeting on 19 February, the Central Bank agreed to lower the Official Cash Rate (OCR)...
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 2024 to 2014.
Source: Macrobond.
New Zealand Interest Rate Data
| 2020 | 2021 | 2022 | 2023 | 2024 | |
|---|---|---|---|---|---|
| Official Cash Rate (%, eop) | 0.25 | 0.75 | 4.25 | 5.50 | 4.25 |
| 90-Day Bank Bill (%, eop) | 0.26 | 0.91 | 4.53 | 5.63 | 4.27 |
| 10-Year Bond Yield (%, eop) | 0.99 | 2.37 | 4.48 | 4.38 | 4.53 |
Central Bank decreases rates in February
Latest bank decision: At its meeting on 19 February, the Central Bank agreed to lower the Official Cash Rate (OCR) by 50 basis points to 3.75%, taking total rate cuts since mid-2024 to 175 basis points.
Monetary policy drivers: The Central Bank's decision was primarily driven by inflation being sustainably within the target range of 1.0 to 3.0 percent, measures of core inflation converging towards the target midpoint, and subdued economic activity.
Policy outlook: The Central Bank indicated that if economic conditions continue to evolve as projected, it has the scope to lower the OCR further through 2025. This is in line with our Consensus, which is for multiple rates cuts between now and end-2025.
Panelist insight: On the outlook, United Overseas Bank’s Lee Sue Ann said: “With the OCR now much closer to neutral and the economy recovering slowly, we expect a more cautious RBNZ from here. Our view is that this is likely the last 50bps cut. For now, we look for a further 75bps of rate cuts in clips of 25bps for the rest of this year, taking the OCR to 3.00% by 3Q25.” Goldman Sachs analysts said: “From our perspective, we continue to expect the RBNZ to slow the pace of cuts to 25bps per meeting to reach a terminal rate of 3.0% in July 2025. That said, we see risks skewed to larger/deeper cuts if 'hard' data do not start to show signs of improvement, including upcoming data on GDP growth.”
Consensus Forecasts and Projections for the next ten years
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 16 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.
Want to get access to the full dataset of New Zealand interest rate forecasts? Send an email to info@focus-economics.com.
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