New Zealand skyline

Nueva Zelanda Actividad económica May 2023

Nueva Zelanda: RBNZ hikes rate in May; signals end of tightening cycle

At its 24 May meeting, the Reserve Bank of New Zealand (RBNZ) hiked the official cash rate (OCR) to 5.50% from 5.25%, marking the twelfth consecutive increase. The hike, which was expected by markets, was supported by five out of the seven members of the committee, with the other two voting to raise the OBC by 50 basis points.

The Bank’s decision came amid softening price pressures and easing labor shortages, as previous monetary policy tightening is already cooling demand dynamics. The Bank expects net migration to increase to pre-Covid trend levels over the coming quarters, but it deemed the impact of this on inflation as uncertain. The RBNZ now projects the OCR to peak at 5.50%, which implies the end of the tightening cycle. Meanwhile, the Bank expects inflation to return to its 1.0-3.0% target band in Q3 2024.

Looking forward, the Bank said in a statement that it “is confident that, with interest rates remaining at a restrictive level for some time, consumer price inflation will return to within its target range”.

Commenting on the release, Lee Sue Ann, economist at UOB, stated:

“Overall, we expect the RBNZ to retain a tightening bias, keeping the door open for a further rate hike if needed. At this juncture, we are keeping our OCR forecast at 5.50% for the rest of this year, while bearing in mind that the next monetary policy meeting will be on 12 July, and a lot can still change from now till then.”

The next monetary policy meeting is scheduled for 12 July.

Informe de muestra gratuito

Acceda a información esencial en el menor tiempo posible. FocusEconomics proporciona cientos de informes de previsión consensuados de las autoridades de investigación económica más reputadas del mundo.
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 X Download Fullscreen