Reserve Bank of New Zealand (RBNZ) Governor Anna Breman delivers prepared remarks on the Monetary Policy Review (MPR) and answers media questions at the press conference following the September monetary policy announcement. Previously, Breman and his colleagues raised the official cash rate (OCR) by 25 basis points (bps) to 2.75%, as widely expected. Key quotes from the RBNZ press conference The key question is whether the economic recovery broadens as expected. May. We can reduce inflation while supporting the economy. Moving the OCR towards a neutral level is still accommodative. We may need to take some time to evaluate the policy stance. Do not emphasize a pre-established course, the timing of rate increases is very uncertain. Elections do not enter into our policy decision. There will probably be a new increase in OCR, we will evaluate the impact of the increases already made. This section below was published at 02:00 GMT following monetary policy announcements from the Reserve Bank of New Zealand (RBNZ). 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 was aligned with market expectations. RBNZ Monetary Policy Review (MPR) Summary The committee considers it is appropriate to phase out monetary stimulus to return inflation to the target midpoint of 2 per cent while supporting growth and employment. This decision reduces the risk that the OCR will need to increase further in the future. Future policy decisions will depend on the committee’s judgment on the balance of risks to inflation over the medium term. New Zealand’s economic recovery has most likely resumed, but remains uneven. The committee remains vigilant and will respond as necessary to ensure that inflation sustainably returns to the midpoint of 2 percent 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 labor market should improve. RBNZ interest rate meetingThe monetary policy committee today reached a consensus to increase the OCR by 25 basis points to 2.75 per cent. The committee decided by consensus to increase the OCR by 25 basis points to 2.75 percent. After lackluster 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 judgment on the balance of risks to inflation over the medium term. The recovery is expected to strengthen and broaden. Conditions All members agreed that central projection for OCR is appropriate. Conditional on the core economic outlook, members considered that the OCR may need to increase further. The committee assesses that there remains excess capacity in the economy, particularly in the labor 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 considered the risks to inflation balanced. All members agreed that the downside risks to activity were significant and that the recovery could remain uneven. 2.84%). 2027 (pvs 3.15%). The RBNZ forecasts an official cash rate of 3.28% in September 2029. NZD/USD Reaction to RBNZ Interest Rate Decision The New Zealand Dollar (NZD) has come under intense selling pressure in an immediate reaction to the RBNZ interest rate decision. The NZD/USD pair is currently trading at 0.5857, down 0.58% on the day. Price of the New Zealand dollar today The following table shows the percentage change of the New Zealand dollar (NZD) against the main currencies quoted today. The New Zealand dollar was the weakest against the US dollar. USDEURGBPJPYCADAUDNZDCHFUSD0.11%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 0.66%0.09%CAD-0.10%0.00%-0.03%-0.05%-0.11%0.61%0.04%AUD0.00%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 the percentage changes of the major currencies against each other. The base currency is chosen from the left column, while the quote currency is chosen from the top row. For example, if you choose the New Zealand dollar from the left column and move along the horizontal line to the US dollar, the percentage change shown in the box will represent NZD (base)/USD (quote). This section below was published on September 1 at 22:00 GMT in advance of the Reserve Bank of New Zealand’s (RBNZ) interest rate decision. The Reserve Bank of New Zealand will raise the key interest rate to 2.75% on Wednesday. Comments from RBNZ Governor Breman and updated OCR forecasts will be closely watched. Policy announcements from the RBNZ could intensify volatility around the New Zealand dollar. The Reserve Bank of New Zealand (RBNZ) is on track to deliver on a rolling 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 the deeply divided outcome expected during July’s monetary policy meeting. The RBNZ interest rate announcement will be published at 02:00 GMT, accompanied by the Monetary Policy Review (MPR), Monetary Policy Statement (MPS) and meeting minutes. Governor Anna Breman’s press conference will take place at 03:00 GMT. The New Zealand Dollar (NZD) is expected to see intense volatility as all eyes are on the New Zealand central bank’s signals on the monetary policy outlook, particularly amid an uncertain environment caused by the prolonged conflict in the Middle East. What to expect from the RBNZ interest rate decision? To strengthen, a further reduction in monetary stimulus is likely to be required to return inflation to the target midpoint of 2 percent.” Minutes from the July meeting showed that “the committee agreed that while further OCR increases are likely in the coming meetings, their timing is very uncertain.” a reason to remain hawkish. Headline inflation was 4.1% year-on-year in the June quarter, exceeding the central bank’s forecast of 3.9%. At the same time, the Inflation expectations have moderated for the third quarter and the labor market remains weak, with the unemployment rate rising to 5.6%. This creates a difficult balancing act, as inflation remains too high and the recovery is still fragile. That said, the RBNZ’s updated projections, particularly the OCR forecast, will also be closely scrutinized for any signals on the extent and timing of further rate hikes. If RBNZ policymakers signal that another hike is more likely in October or raise their projected terminal OCR from around 3.28%, the NZD could post a strong recovery against the US dollar (USD). Westpac says markets could then raise prices in both October and December, taking the OCR towards 3.25% by the end of the year. On the other hand, if the New Zealand central bank moves into wait-and-see mode to assess the economy. After the recent spate of rate hikes, markets could scale back expectations of another liftoff in October. That would put additional bearish pressure on the NZD/USD pair. With a 25bp rate hike already largely priced in, the surprise may come from the RBNZ’s guidance in the next two meetings. (21-day SMA) near 0.5900, while maintaining a short-term bullish bias as it remains above the 50-day, 100-day, and 200-day simple moving averages (SMA), clustered between approximately 0.5823 and 0.5849. Relative Strength Index (14) near 50 hints at consolidation momentum after the recent advance. “On the downside, initial support emerges in a broader demand zone defined by the 100-day and 200-day SMAs.”
