RBNZ Set for Second Interest Rate Hike

The Reserve Bank of New Zealand (RBNZ) is poised to raise interest rates for the second time, according to BNY's Geoff Yu. In an analysis, Yu expects a 25 basis point hike to 2.75%, driven by high inflation and strong confidence data.

This decision comes as New Zealand confronts inflation above target despite uneven domestic growth. Markets will focus on updated macroeconomic forecasts and the Official Cash Rate (OCR) track for guidance on future tightening.

The RBNZ previously projected the OCR to reach 3.0% by Q1 2027 and gradually rise to 3.3%, while markets now price around 3.25% by March 2027.