Outlook for Borrowers: Post May MPS
The Reserve Bank of New Zealand (RBNZ) left the Official Cash Rate (OCR) unchanged at 2.25% at Wednesday’s Monetary Policy Statement (MPS). While this outcome was widely expected by economists and broadly reflected in market pricing, the decision was finely balanced. The three external members of the six-member committee voted for a 25bp hike, with Governor Breman casting the deciding vote. The Bank also noted that “the OCR will most likely need to increase sooner and by more than envisaged in the February Monetary Policy Statement.”
Outlook for Borrowers: Post April MPR
The Reserve Bank of New Zealand (RBNZ) maintained the Official Cash Rate (OCR) at 2.25% at its latest Monetary Policy Review (MPR). Although committee members reportedly expressed a range of views, the decision was ultimately reached by consensus. The outcome was unanimously anticipated by economists and was consistent with market implied expectations that the policy rate would remain unchanged. As the announcement occurred at a policy review, the Bank did not publish a complete set of updated forecasts. However, it provided a partial assessment of the potential effects of the Middle East conflict on inflation.