RBNZ Hikes OCR by 25bp, Signals Possible Pause in Rate Increases

The Reserve Bank of New Zealand (RBNZ) raised its Official Cash Rate (OCR) by 25 basis points to 5.50% on May 24, 2023, in line with market expectations.

This marks the 12th consecutive increase since October 2021, but the accompanying statement signaled a potential end to the tightening cycle, prompting the New Zealand dollar to fall against major currencies.

The RBNZ's Monetary Policy Committee said the current level of interest rates is 'restrictive' and that they will assess the impact of previous hikes on the economy before considering further moves.