Reserve Bank of New Zealand’s (RBNZ) Governor Anna Breman presents the prepared remarks on the Monetary Policy Review (MPR) and responds to media questions at the press conference after the September monetary policy announcement.
Earlier on, Breman and her colleagues hiked the Official Cash Rate (OCR) by 25 basis points (bps) to 2.75%, as widely expected.
RBNZ press conference key quotes
Key question is whether economic recovery broadens as expected.
OCR track is very similar to one we had in May.
We can bring inflation down while supporting economy.
Moving OCR up toward neutral, still accomodative.
May need to take some time to assess stance of policy.
Stressing not on a preset course, rate rise timing highly uncertain.
Election does not come into our policy decision.
Likely there will be a further OCR increase, will assess impact of hikes already done.
Export sector has been significantly stronger than anticipated.
This section below was published at 02:00 GMT following the Reserve Bank of New Zealand (RBNZ) monetary policy announcements.
The Reserve Bank of New Zealand (RBNZ) raised the Official Cash Rate (OCR) by 25 basis points (bps) to 2.75% from 2.50% after concluding the September monetary policy meeting on Wednesday.
The decision aligned with market expectations.
Summary of the RBNZ Monetary Policy Review (MPR)
The committee judges that gradually removing monetary stimulus is appropriate to return inflation to the 2 percent target mid-point while supporting growth and employment.
This decision reduces the risk that the OCR needs to increase by more later. Future policy decisions will depend on the committee’s judgement of the balance of risks to medium-term inflation.
New Zealand’s economic recovery has most likely resumed but remains uneven.
The committee remains vigilant and will respond as necessary to ensure inflation returns sustainably to the 2 percent target mid-point over the medium term.
The recovery is expected to strengthen and broaden.
The committee expects New Zealand’s export sector to remain resilient and household spending to gradually increase.
Conditions in the labour market should improve.
Minutes of the RBNZ interest rate meeting
The monetary policy committee today reached consensus to increase the OCR to 25 basis points to 2.75 percent.
The committee decided by consensus to increase the OCR by 25 basis points to 2.75 percent
After lacklustre growth in the June quarter, New Zealand’s economic recovery has most likely resumed but remains uneven.
Future policy will depend on the committee’s judgement of the balance of risks to medium-term inflation.
Recovery is expected to strengthen and broaden.
Conditions in the labour market should improve as the recovery gathers pace.
Committee judged that increasing the OCR to 2.75 percent is appropriate to sustainably return inflation to the 2 percent target mid-point.
The future OCR path is not pre-determined.
Indicators of medium-term inflation are consistent with inflation returning to target.
All members agreed that the central projection for the OCR is appropriate.
Conditional on the central economic outlook, members judged that the OCR may need to increase further.
On balance, the committee assesses that spare capacity remains in the economy, particularly in the labour market.
Hayley Gourley, Karen Silk, Prasanna Gai and Anna Breman saw upside risks to inflation relative to the central projection.
Paul Conway and Carl Hansen saw risks to inflation as balanced.
All members agreed that downside risks to activity were significant and that the recovery could remain uneven.
Key takeaways from RBNZ Monetary Policy Statement
RBNZ sees official cash rate at 2.81% in December 2026 (pvs 2.84%).
RBNZ sees official cash rate at 3.12% in September 2027 (pvs 3.11%).
RBNZ sees TWI NZD at around 66.9% in September 2027 (pvs 66.6%).
RBNZ sees annual CPI at 2.4% by September 2027 (pvs 2.0%).
RBNZ sees official cash rate at 3.15% in December 2027 (pvs 3.15%).
RBNZ sees official cash rate at 3.28% in September 2029.
NZD/USD reaction to the RBNZinterest rate decision
The New Zealand Dollar (NZD) has come under intense selling pressure in an immediate reaction to theRBNZ interest ratedecision. TheNZD/USDpair currently trades at 0.5857, down 0.58% on the day.
New Zealand Dollar Price Today
The table below shows the percentage change of New Zealand Dollar (NZD) against listed major currencies today. New Zealand Dollar was the weakest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.11% | 0.07% | 0.03% | 0.10% | -0.01% | 0.74% | 0.14% | |
| EUR | -0.11% | -0.04% | -0.06% | -0.01% | -0.11% | 0.61% | 0.03% | |
| GBP | -0.07% | 0.04% | -0.02% | 0.03% | -0.08% | 0.62% | 0.07% | |
| JPY | -0.03% | 0.06% | 0.02% | 0.05% | -0.06% | 0.66% | 0.09% | |
| CAD | -0.10% | 0.00% | -0.03% | -0.05% | -0.11% | 0.61% | 0.04% | |
| AUD | 0.00% | 0.11% | 0.08% | 0.06% | 0.11% | 0.72% | 0.16% | |
| NZD | -0.74% | -0.61% | -0.62% | -0.66% | -0.61% | -0.72% | -0.56% | |
| CHF | -0.14% | -0.03% | -0.07% | -0.09% | -0.04% | -0.16% | 0.56% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the New Zealand Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent NZD (base)/USD (quote).
This section below was published on September 1 at 22:00 GMT as a preview of the Reserve Bank of New Zealand (RBNZ) interest rate decision.
- The Reserve Bank of New Zealand is set to hike the key interest rate to 2.75% on Wednesday.
- RBNZ Governor Breman’s comments and updated OCR forecasts will be closely scrutinized.
- The RBNZ policy announcements could intensify volatility around the New Zealand Dollar.
The Reserve Bank of New Zealand (RBNZ) is on track to deliver a follow-through interest rate hike, raising the Official Cash Rate (OCR) by another 25 basis points (bps) from 2.50% to 2.75% on Wednesday.
Experts expect a consensus decision this week, unlike a deeply divided outcome predicted during the July monetary policy meeting.
The RBNZ interest rate announcement is due at 02:00 GMT, accompanied by the Monetary Policy Review (MPR), Monetary Policy Statement (MPS) and the Minutes of the meeting. Governor Anna Breman’s press conference will follow at 03:00 GMT.
The New Zealand Dollar (NZD) is set to experience intense volatility as all eyes are on the Kiwi central bank’s signals on the monetary policy outlook, particularly amid an uncertain environment caused by the prolonged Middle East conflict.
What to expect from the RBNZ interest rate decision?
Following July’s hawkish hike, the RBNZ said in its Monetary Policy Review (MPR) that “with inflation still above target and economic activity expected to strengthen, some further reduction in monetary stimulus is likely to be required to return inflation to the 2 percent target mid-point.”
The Minutes of the July meeting showed that “the committee agreed that while further OCR increases appear likely at upcoming meetings, their timing is highly uncertain.”
That leaves the upcoming September meeting as a ‘live’ one, with another rate hike fully baked in. Therefore, the main focus will be on whether Breman and company offer any hints on the likelihood of further tightening in October.
Additionally, the economic backdrop gives the RBNZ a reason to stay hawkish. Headline inflation was 4.1% year-on-year in the June quarter, exceeding the central bank’s 3.9% forecast.
At the same time, inflation expectations have eased for the third quarter, and the labor market remains soft, with the Unemployment Rate rising to 5.6%. This creates a difficult balancing act, as inflation remains too high, with the recovery still fragile.
That said, the RBNZ updated projections, particularly the OCR forecast, will also be closely scrutinized for any signals on the scope and the timing of further rate increases.
How will the RBNZ interest rate decision impact the New Zealand Dollar?
If RBNZ policymakers signal that another hike in October is more likely than not or raise their projected terminal OCR from around 3.28%, the NZD could stage a solid recovery against the US Dollar (USD). Westpac says markets could then price hikes in both October and December, taking the OCR toward 3.25% by year-end.
On the other hand, if the Kiwi central bank flips to wait-and-see mode to assess the economy after the recent streak of rate rises, markets could scale back expectations for another lift-off in October. That would exert additional downside pressure on the NZD/USD pair.
With a 25 bps rate hike largely priced in, the surprise may come from the RBNZ’s guidance on the next two meetings.
Dhwani Mehta, Asian Session Lead Analyst at FXStreet, offers a brief technical outlook for NZD/USD:
“The pair has cracked the 21-day simple moving average (SMA) near 0.5900, while holding a bullish near-term bias as it remains above the 50-, 100- and 200-day simple moving averages (SMAs), clustered between roughly 0.5823 and 0.5849. The Relative Strength Index (14) near 50 hints at consolidative momentum after the recent advance. ”
“On the downside, initial support emerges at a broader demand zone defined by the 100- and 200-day SMAs at 0.5845–0.5847, with the 50-day SMA at 0.5819 reinforcing the medium-term floor if a deeper pullback unfolds. Conversely, if NZD/USD resumes its recent uptrend, the first critical resistance is aligned at the 12-week high of 0.5989, above which the 0.6050 psychological level will come into play.”
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