RBNZ Boosts OCR as Inflation Hits 4.1%

The Reserve Bank of New Zealand (RBNZ) has increased the Overnight Cash Rate (OCR) by 25 basis points to 2.75%. This decision was made after reviewing inflation data, which rose to 4.1% in the June quarter due to higher fuel prices caused by the conflict in the Middle East.

Despite this increase, core inflation, expected wage growth, and inflation expectations remain consistent with the target of returning to a 1-3% inflation range by mid-2027 and reaching the 2% midpoint later next year.

The RBNZ also noted that New Zealand's economic recovery has likely resumed but remains uneven. Resilient demand from trading partners is expected to support growth, although it may be affected by global events.