Majority of NZIER members support holding New Zealand’s Official Cash Rate amid supply-driven inflation and weak economic data.
The New Zealand Dollar (NZD) edged lower against the USD, trading near 0.5870 after most NZIER shadow board members backed keeping the Official Cash Rate at 2.25%. The group cited supply-side oil price pressures and soft economic indicators, including a 0.2% GDP growth and rising unemployment expected to hit 5.6%.
A minority of three members advocated for immediate tightening, arguing that prolonged low or negative real interest rates and inflation risks warrant action. The NZD/USD pair maintained gains as the USD weakened on reduced safe-haven demand, fueled by optimism over a potential US-Iran agreement.
The proposed deal includes a 60-day ceasefire extension and the reopening of the Strait of Hormuz, easing broader market concerns about inflation and Federal Reserve policy.