The Reserve Bank of New Zealand maintained rates but indicated at least two more hikes by year-end, boosting the NZD.
The Reserve Bank of New Zealand left its policy rate unchanged at 2.25%, aligning with market expectations. However, the central bank adopted a hawkish tone, signaling a need for faster monetary tightening to address inflationary pressures.
Analysts now anticipate at least two additional rate hikes before the end of the year, revising earlier projections. The front-end of the yield curve reacted positively, reflecting increased confidence in the RBNZ’s commitment to tightening.
The New Zealand Dollar strengthened following the announcement, as traders priced in the likelihood of higher rates in the near term.