RBNZ Expected to Raise Interest Rates Again as Inflation Concerns Linger
New Zealand's Reserve Bank (RBNZ) is widely expected to raise its Official Cash Rate (OCR) by another 25 basis points on Wednesday, following a similar increase in July.
The OCR is currently at 2.50%, and economists at ANZ NZ, ASB, Westpac NZ, BNZ, and Kiwibank all predict it will rise to 2.75%.
Kiwibank chief economist Jarrod Kerr said the RBNZ's decision will likely be part of a 'three-step move' to 3%, with the goal of removing stimulatory settings and returning inflation to around 2%.
BNZ head of research Stephen Toplis believes the OCR modelled peak in the RBNZ's May Monetary Policy Statement was 3.28% for June 2029, but expects it will be bumped up to 3.3% for September 2029.
The RBNZ is tasked with keeping inflation between 1% and 3%, specifically targeting 2%. Economists agree that the central bank will continue to raise interest rates to achieve this goal, but there are differing views on whether further increases will be necessary beyond October.