The Reserve Bank of New Zealand raised its policy rate for the first time since May 2023, aligning with market expectations.
The Reserve Bank of New Zealand increased its policy rate by 25 bps to 2.50%, marking its first hike since May 2023. The move strengthened the New Zealand Dollar as markets had largely priced in the adjustment and anticipated further tightening.
Overnight index swaps had already factored in the 25 bps increase and additional hikes. However, expectations for future moves vary, with some analysts projecting only two more increases by March.
The currency’s immediate reaction reflected relief that the RBNZ’s decision matched consensus forecasts, reducing uncertainty in short-term rate expectations.