Majority of economists expect the Reserve Bank of New Zealand to raise rates for the first time in over three years amid persistent inflation.
The Reserve Bank of New Zealand is set to increase its official cash rate by 25 basis points to 2.50% on July 8, marking its first hike in more than three years. The move comes as inflation remains at 3.1%, above the central bank’s 1-3% target range, despite a retreat in oil prices near pre-war levels.
A poll of 28 economists showed 22 forecasting the hike, while six expect no change. Markets will scrutinize the accompanying statement for clues on further tightening, with 14 of 26 economists predicting another 25bps increase to 2.75% by September. Major banks are divided, with ANZ and BNZ supporting a hike, while ASB, Kiwibank, and Westpac forecast no change.
A surprise decision to hold rates could pressure the New Zealand dollar and reset near-term rate expectations, particularly as other central banks like the RBA and ECB have already tightened policy this year.