Most market commentators expect the RBNZ to leave the official cash rate unchanged at 2.25% in today’s review.
Recent comments from Governor Anna Breman help explain why markets see the RBNZ leaning towards a more dovish stance. Breman has said monetary policy should not overreact to price moves it has limited ability to influence in the short term (i.e., oil shocks).
On the other side are the hawk commentators, who view the oil price as a more traditional inflation risk. Westpac economists argue that fuel disruptions could push annual inflation up to 4%, while ASB estimates the current oil shock could add around $55 a week to the average household costs in 2026.
Hawks also warn that if other central banks tighten policy while the RBNZ holds steady, a weaker New Zealand dollar could trigger another wave of imported inflation.
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