The bank cites persistent inflation risks and a weaker NZD as key factors for the expected 25 basis point hike next week.
ANZ expects the Reserve Bank of New Zealand to raise the Official Cash Rate by 25 basis points to 2.50% at its July 8 review, despite a sharp decline in oil prices. The bank argues the move is necessary due to inflation remaining above the target band and the NZD trading softer than assumed, which could fuel further price pressures.
The call reflects a risk management approach rather than a strong economic signal, with ANZ noting the OCR remains 75 basis points below neutral. A hike paired with noncommittal forward guidance is seen as the most balanced option, avoiding potential volatility from either a hawkish hold or a more aggressive tightening stance.
Markets will closely watch the RBNZ’s FX channel, as a further currency slide could reinforce the case for additional tightening. Earlier polls had also tipped a 25 basis point hike, though some banks, like Westpac, had favored a hold.