RBNZ Lifts OCR to 2.75% Amid Ongoing Inflation Concerns

The Reserve Bank of New Zealand (RBNZ) raised its Official Cash Rate (OCR) by 25 basis points to 2.75% at its February 2025 meeting, marking the fourth consecutive increase as it fights against persistent inflation.

The RBNZ cited robust domestic demand, a tight labor market, and elevated core inflation as key drivers behind the decision.

While the move was widely expected by markets, the New Zealand dollar (NZD) traded slightly higher against the US dollar before giving up some gains, indicating that the rate hike was already priced in.

The RBNZ's Governor Adrian Orr emphasized that the bank remains focused on ensuring inflation expectations stay anchored and that the current OCR level is still below neutral estimates.