Markets expect a 25-basis-point hike by the Reserve Bank of New Zealand amid stubborn inflation, despite mixed economist views.
The Reserve Bank of New Zealand is widely expected to raise its official cash rate (OCR) to 2.5% on July 8, marking a shift from its recent hold stance. A poll of economists shows consensus for a 25-basis-point hike, driven by persistent inflationary pressures despite a sharp decline in oil prices.
Prior expectations leaned toward a pause, with some major banks like Westpac and ASB advocating for a hold. However, ANZ and other institutions now forecast a hike, citing ongoing inflation risks. The NZIER shadow board remains split, reflecting uncertainty over the tightening cycle’s trajectory.
The New Zealand dollar’s gains may be limited even if the RBNZ delivers the expected hike, as markets weigh the impact of softer oil prices on future policy moves.