News

BREAKING: RBNZ raises OCR by 50 bps

The Monetary Policy Committee today increased the Official Cash Rate (OCR) by 50 basis points, from 4.75 percent to 5.25 percent.

Wednesday, April 05th 2023

The Committee agreed the OCR needs to increase, as previously indicated, to return inflation to the 1-3 percent target range over the medium term. Inflation is still too high and persistent, and employment is beyond its maximum sustainable level.

The level of economic activity over the December quarter was lower than anticipated in our February Monetary Policy Statement and there are emerging signs of capacity pressures in the economy easing. However, demand continues to significantly outpace the economy’s supply capacity, thereby maintaining pressure on annual inflation.

The recent severe weather events in the North Island have led to higher prices for some goods and services. This higher near-term CPI inflation increases the risk that inflation expectations persist above our target range. 

Over the medium term, the Committee anticipates economic activity to be supported by rebuilding efforts in the aftermath of the weather events. The demand on resources is expected to add to inflation pressure by more than assumed in the February Monetary Policy Statement.

Global growth is expected to be below average, contributing to lower demand for New Zealand’s key commodity exports. Continued growth in New Zealand’s service exports, in particular tourism, is assumed to provide some offset to this drop in export revenue.

New Zealand’s economic growth is expected to slow through 2023, given the slowing global economy, reduced residential building activity, and the ongoing effects of the monetary policy tightening to date. This slowdown in spending growth is necessary to return inflation to target over the medium-term.

The Committee agreed that the OCR needs to be at a level that will reduce inflation and inflation expectations to within the target range over the medium term. The Committee agreed that maintaining the current level of lending rates for households and businesses is necessary to achieve this, along with a rise in deposit rates. New Zealand’s financial system is well positioned to manage through a period of slower economic activity.

Comments

No comments yet

SBS FirstHome Combo 4.69
TSB Special 5.35
Unity First Home Buyer special 5.49
ASB Bank 5.49
Westpac Special 5.49
Co-operative Bank - First Home Special 5.49
AIA - Go Home Loans 5.49
Heartland Bank - Online 5.49
ICBC 5.55
Kiwibank Special 5.55
Nelson Building Society 5.55
BNZ - Std 5.29
TSB Special 5.29
ASB Bank 5.29
Kiwibank Special 5.29
Westpac Special 5.29
AIA - Go Home Loans 5.29
Heartland Bank - Online 5.39
ANZ Special 5.44
Unity 5.49
Co-operative Bank - Owner Occ 5.49
SBS Bank Special 5.49
Westpac Special 5.39
BNZ - Classic 5.59
ASB Bank 5.79
BNZ - Std 5.79
ICBC 5.79
SBS Bank Special 5.79
AIA - Go Home Loans 5.79
Co-operative Bank - Owner Occ 5.89
Kiwibank Special 5.89
TSB Special 5.89
Kainga Ora 5.89
AIA - Back My Build 4.94
SBS FirstHome Combo 4.94
CFML 321 Loans 5.80
CFML Home Loans 6.25
Co-operative Bank - Owner Occ 6.45
Co-operative Bank - Standard 6.45
Kiwibank - Offset 6.75
Kiwibank 6.75
ASB Bank 6.89
ANZ 6.89
BNZ - Std 6.94

More Stories

Friday, January 31st 2025

[TMM Podcast] Yelsa serves up “marine reserve” of property buyers

It’s been years in the making and former real estate agent Mike Harvey is now coming to market with his platform matching buyers and sellers, an offering he says will be a gamechanger for the industry.

Leaving last year's stumbling housing market behind

Friday, January 17th 2025

Leaving last year's stumbling housing market behind

As interest rates ease and job losses climb, New Zealand’s housing market faces a mixed year of modest growth, with conflicting forces shaping the outlook for homebuyers and investors.

Don’t bet on house prices rising faster than incomes

Wednesday, January 15th 2025

Don’t bet on house prices rising faster than incomes

Former Reserve Bank Governor and National Party leader Don Brash says there are grounds for believing that house prices may finally have ended the three-decade period when they rose significantly faster than incomes.

Similar Price Growth

Friday, January 10th 2025

Similar Price Growth

Although houses prices typically rise more than apartments over the long-term, the gap is not as wide as many people expect.