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RBNZ increases spot rate by 25bp, as expected


Official spot rate (OCR) of 0.5% to 0.75% now.

  • The Committee agreed that it remained appropriate to continue reducing monetary stimulus measures in order to maintain price stability and support maximum sustainable employment.

RBNZ projections for the way forward:

  • sees the official cash rate at 0.94% in March 2022 (previously 0.86%)
  • at 2.14% in December 2022 (pvs 1.62%)
  • at 2.3% in March 2023 (pvs 1.77%)
  • to 2.61% in December 2024

Sees an annual CPI of 3.3% by December 2022 (pvs 2.2%)

Find out more about the Bank’s communications:

  • says headline CPI inflation is expected to exceed 5% in the near term before returning to the 2% midpoint over the next two years.
  • asserts that immediate relative price shocks are likely to generate more widespread price increases
  • capacity pressures continued to tighten
  • A wide range of economic indicators show that the New Zealand economy continues to exceed its current potential.
  • household spending and business investment will be held back in the short term by persistent health uncertainties linked to covid-19
  • says recent lockdown and national health restrictions in Auckland have caused a sharp contraction in economic activity
  • says capacity pressures have continued to tighten

Governor Orr’s press conference will take place at 0200 GMT.

Following the instinctive drop in the kiwi $ following the eagerly awaited announcement of a 25bp rise, the NZD / USD is down a few points

For today’s context, the previews:

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