Official Cash Rate now 5.5%

The Reserve Bank of New Zealand’s (RBNZ) Monetary Policy Committee has voted to raise the Official Cash Rate (OCR) from 5.25% to 5.5%.

The RBNZ has indicated that the OCR will need to stay at a restrictive level “for the foreseeable future” to get inflation back down to the RBNZ’s 1% - 3% annual target range.

The RBNZ has acknowledged that demand in the economy is slowing, with businesses reporting less demand for their goods and services, and homeowners feeling less wealthy due to falling house prices. However, low unemployment, the uncertain impact of high immigration on overall spending, rapid recovery in overseas visitor numbers and the repair and rebuild of parts of the North Island due to recent severe weather events all support economic growth.

The RBNZ is still forecasting 5.5% as the peak for the OCR, with cuts anticipated from the third quarter of 2024.

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