Reserve Bank of New Zealand’s (RBNZ) Governor Anna Breman presents the prepared remarks on the Monetary Policy Review (MPR) and responds to media questions at the press conference after the September monetary policy announcement.

Earlier on, Breman and her colleagues hiked the Official Cash Rate (OCR) by 25 basis points (bps) to 2.75%, as widely expected.

RBNZ press conference key quotes

Key question is whether economic recovery broadens as expected.

OCR track is very similar to one we had in May.

We can bring inflation down while supporting economy.

Moving OCR up toward neutral, still accomodative.

May need to take some time to assess stance of policy.

Stressing not on a preset course, rate rise timing highly uncertain.

Election does not come into our policy decision.

Likely there will be a further OCR increase, will assess impact of hikes already done.

Export sector has been significantly stronger than anticipated. 

This section below was published at 02:00 GMT following the Reserve Bank of New Zealand (RBNZ) monetary policy announcements.

The Reserve Bank of New Zealand (RBNZ) raised the Official Cash Rate (OCR) by 25 basis points (bps) to 2.75% from 2.50% after concluding the September monetary policy meeting on Wednesday.

The decision aligned with market expectations.

Summary of the RBNZ Monetary Policy Review (MPR)

The committee judges that gradually removing monetary stimulus is appropriate to return inflation to the 2 percent target mid-point while supporting growth and employment.

This decision reduces the risk that the OCR needs to increase by more later. Future policy decisions will depend on the committee’s judgement of the balance of risks to medium-term inflation.

New Zealand’s economic recovery has most likely resumed but remains uneven.

The committee remains vigilant and will respond as necessary to ensure inflation returns sustainably to the 2 percent target mid-point over the medium term.

The recovery is expected to strengthen and broaden.

The committee expects New Zealand’s export sector to remain resilient and household spending to gradually increase.

Conditions in the labour market should improve.

Minutes of the RBNZ interest rate meeting

The monetary policy committee today reached consensus to increase the OCR to 25 basis points to 2.75 percent.

The committee decided by consensus to increase the OCR by 25 basis points to 2.75 percent

After lacklustre growth in the June quarter, New Zealand’s economic recovery has most likely resumed but remains uneven.

Future policy will depend on the committee’s judgement of the balance of risks to medium-term inflation.

Recovery is expected to strengthen and broaden.

Conditions in the labour market should improve as the recovery gathers pace.

Committee judged that increasing the OCR to 2.75 percent is appropriate to sustainably return inflation to the 2 percent target mid-point.

The future OCR path is not pre-determined.

Indicators of medium-term inflation are consistent with inflation returning to target.

All members agreed that the central projection for the OCR is appropriate.

Conditional on the central economic outlook, members judged that the OCR may need to increase further.

On balance, the committee assesses that spare capacity remains in the economy, particularly in the labour market.

Hayley Gourley, Karen Silk, Prasanna Gai and Anna Breman saw upside risks to inflation relative to the central projection.

Paul Conway and Carl Hansen saw risks to inflation as balanced.

All members agreed that downside risks to activity were significant and that the recovery could remain uneven.

Key takeaways from RBNZ Monetary Policy Statement

RBNZ sees official cash rate at 2.81% in December 2026 (pvs 2.84%).

RBNZ sees official cash rate at 3.12% in September 2027 (pvs 3.11%).

RBNZ sees TWI NZD at around 66.9% in September 2027 (pvs 66.6%).

RBNZ sees annual CPI at 2.4% by September 2027 (pvs 2.0%).

RBNZ sees official cash rate at 3.15% in December 2027 (pvs 3.15%).

RBNZ sees official cash rate at 3.28% in September 2029.

NZD/USD reaction to the RBNZ interest rate decision

The New Zealand Dollar (NZD) has come under intense selling pressure in an immediate reaction to the RBNZ interest rate decision. The NZD/USD pair currently trades at 0.5857, down 0.58% on the day.