RBNZ Delivers Second Straight Rate Hike as Inflation Tops 4%

The Reserve Bank of New Zealand (RBNZ) has raised its cash rate by 25 basis points to 2.75%, marking a second consecutive hike after a July increase.

This move reflects the need for gradual monetary stimulus removal and bringing inflation back to its target midpoint of 2% while supporting growth and employment.

The decision comes as annual inflation rose to 4.1% in Q2 2026, primarily due to higher fuel prices resulting from the Middle East conflict.

However, core inflation, wage growth, and inflation expectations remain consistent with returning inflation to the 1-3% target band by mid-2027.