RBNZ Expected to Hike Rates to 2.75% in September

According to UOB Global Economics & Markets Research, led by economist Lee Sue Ann, the Reserve Bank of New Zealand (RBNZ) is expected to raise its Official Cash Rate to 2.75% at the September meeting. This change reflects persistent inflation, currently standing at 4.1%, as well as broad price increases and hawkish guidance from the RBNZ.

The RBNZ has been gradually normalising interest rates since last year, with this latest move seen as a continuation of that process rather than the start of a more forceful hiking cycle. Despite a soft labour market, policymakers may decide to deliver additional tightening to combat inflation.

UOB still anticipates only gradual further tightening, with policy remaining data-dependent. The RBNZ's guidance suggests that some further reduction in monetary stimulus is likely to be required to keep inflation within its 1-3% target range.