ℝ𝕖𝕤𝕖𝕣𝕧𝕖 𝔹𝕒𝕟𝕜 𝕙𝕠𝕝𝕕𝕤 𝕆𝕗𝕗𝕚𝕔𝕚𝕒𝕝 ℂ𝕒𝕤𝕙 ℝ𝕒𝕥𝕖 𝕒𝕥 𝟝.𝟝 𝕡𝕖𝕣𝕔𝕖𝕟𝕥

𝕋𝕙𝕖 ℝ𝕖𝕤𝕖𝕣𝕧𝕖 𝔹𝕒𝕟𝕜 𝕙𝕒𝕤 𝕙𝕖𝕝𝕕 𝕥𝕙𝕖 𝕠𝕗𝕗𝕚𝕔𝕚𝕒𝕝 𝕔𝕒𝕤𝕙 𝕣𝕒𝕥𝕖 (𝕆ℂℝ) 𝕒𝕥 𝟝.𝟝 𝕡𝕖𝕣𝕔𝕖𝕟𝕥, 𝕓𝕦𝕥 𝕣𝕖𝕡𝕖𝕒𝕥𝕖𝕕 𝕔𝕠𝕟𝕔𝕖𝕣𝕟𝕤 𝕒𝕓𝕠𝕦𝕥 𝕤𝕥𝕦𝕓𝕓𝕠𝕣𝕟 𝕚𝕟𝕗𝕝𝕒𝕥𝕚𝕠𝕟 𝕡𝕣𝕖𝕤𝕤𝕦𝕣𝕖𝕤 𝕒𝕟𝕕 𝕕𝕒𝕤𝕙𝕖𝕕 𝕙𝕠𝕡𝕖𝕤 𝕠𝕗 𝕖𝕒𝕣𝕝𝕪 𝕣𝕒𝕥𝕖 𝕔𝕦𝕥𝕤.

E

conomists had expected the benchmark rate to be left unchanged for a fifth consecutive meeting, but acknowledged the risk of a surprise rise to put further pressure on domestic price pressures and get inflation back into the 1-3 percent target zone more quickly.

The central bank said inflation has eased to a two-year low of 4.7 percent as consumers and businesses trimmed spending, and labour market pressures eased because of a large influx of migrants.

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"Core inflation and most measures of inflation expectations have declined, and the risks to the inflation outlook have become more balanced," the Monetary Policy Committee (MPC) said in a statement.

"However, headline inflation remains above the 1 to 3 percent target band, limiting the committee's ability to tolerate upside inflation surprises."

It said the rate rises of the past two years were having the desired effect, and inflation would return to the target band in due course.

"The OCR needs to remain at a restrictive level for a sustained period of time to ensure this occurs."

The RBNZ's indicative forecasts for the OCR showed little prospect of a rate cut before mid-2025.

The central bank's tone remained hawkish as it highlighted concerns the surge in migration would add to inflation pressures that remained by adding to demand for houses and services.

Over the past month, Governor Adrian Orr and chief economist Paul Conway had been talking up the inflation risks and dampening hopes for rate cuts, partly to send a message to banks and finance firms not to bet on early rate cuts this year.

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The MPC also noted the softness in the Chinese economy and the broader risks for global growth, and the possibility central banks around the world will keep their interest rates higher for longer.

However, the statement was less aggressive in tone than the November monetary policy statement and there was no repeat of the threat to raise rates again.

Read the bank's Monetary Policy Statement here. 

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