NZIER Shadow Board Backs OCR Hike Amid Inflation Concerns

The New Zealand Institute of Economic Research's (NZIER) Monetary Policy Shadow Board has released its latest recommendations for the Reserve Bank of New Zealand (RBNZ). The board, comprising experts in economics and finance, advises that the OCR should be increased to bring inflation back down. Just over half of the members, 55%, recommend a 25-basis-point hike in September.

This suggests that the RBNZ needs to continue its efforts to normalize interest rates. However, some board members disagree, arguing that keeping the OCR at 2.50% is more appropriate due to subdued economic activity and low inflation expectations.

The NZIER's Shadow Board aims to provide an independent perspective on monetary policy decisions. Its recommendations are based on analysis of various economic indicators and forecasts.