Reserve Bank of New Zealand leaves its cash rate unchanged, as was very widely expected, but insists it'll remain restrictive with inflation still being too high.

Indeed the track of the OCR from the Bank is slightly higher:

  • Sees official cash rate at 5.63% in March 2024 (prior 5.58%)
  • Sees official cash rate at 5.66% in December 2024 ( prior 5.5%)
  • Sees official cash rate at 5.56% in March 2025 ( prior 5.36%)
  • Sees official cash rate at 3.55% in December 2026


  • Sees NZD TWI at around 70.7% in December 2024 ( prior 71.0%)
  • Sees annual CPI 2.5% by December 2024 ( prior 2.4%)


  • Interest rates are restricting spending in the economy and consumer price inflation is declining, as is necessary to meet the committee's remit.
  • Interest rates will need to remain at a restricted level for a sustained period of time
  • However, inflation remains too high, and the committee remains wary of ongoing inflationary pressures
  • Demand growth has eased, but by less than anticipated over the first half of 2023 in part due to strong population growth
  • The committee is confident that the current level of the OCR is restricting demand
  • The OCR will need to stay restrictive, so demand growth remains subdued, and inflation returns to the 1 to 3 percent target range
  • If inflationary pressures were to be stronger than anticipated, the OCR would likely need to increase further

Bolding above is mine. The Bank seems happy with the rate where it is but is not ruing out further hikes.

From the minutes of the meeting:

  • Committee agreed that interest rates will need to remain at a restrictive level for longer
  • Members agreed they remain confident that monetary policy is restricting demand
  • Ongoing excess demand and inflationary pressures were of concern, given high core inflation
  • Members discussed the possibility of the need for increases to the OCR
  • Members agreed that with interest rates already restrictive, it was appropriate to wait for further data and information
  • Members agreed that monetary policy was supportive of sustainable house prices
  • Pressure in the labour market is easing, although employment remains above its maximum sustainable level
  • Members also noted that most major central banks have indicated that they intend to retain current restrictive policy rates for longer, and are willing to tighten further, if required
  • While growth in parts of the economy is slowing, there has been less of a decline in aggregate demand growth than expected earlier in the year
  • Committee noted that the estimate of the long-run nominal neutral OCR has increased by 25 basis points to 2.50%
RBNZ Governor Orr
RBNZ Governor Orr