RBNZ holds interest rates steady as expected, hints at future easing

Published 09/07/2025, 03:30
© Reuters.

Investing.com-- The Reserve Bank of New Zealand (RBNZ) held its interest rates steady on Wednesday, as widely expected, but signaled that a rate cut could be on the horizon if inflationary pressures continue to ease.

The central bank left its official cash rate (OCR) unchanged at 3.25%, following six consecutive cuts that have lowered the rate by a total of 225 basis points since August 2024.

In its policy statement, the RBNZ’s Monetary Policy Committee noted that medium-term inflation was declining in line with projections, and that headline inflation is expected to fall back to around 2% by early 2026.

However, annual inflation is likely to rise temporarily toward the upper end of the central bank’s 1–3% target band over mid-2025, the central bank said.

The central bank highlighted that the economic outlook remains highly uncertain amid heightened global trade tensions and worries around U.S. tariffs.

With global economic growth forecast to weaken amid tariff tensions, the RBNZ also warned that New Zealand’s recovery could slow, easing price pressures further and increasing the case for a rate cut.

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