A Hawkish Hold

The RBNZ held the OCR at 2.25% following a deadlocked MPC vote, though a 25bps hike in July now appears highly likely. BNZ has raised its terminal rate forecast to 4.0% by May 2027 as inflation pressures from the Middle East conflict mount.

Key Takeaways

• 1.The RBNZ left the Official Cash Rate (OCR) unchanged at 2.25%, but the decision was a deadlock broken by the Governor's casting vote.
• 2.BNZ has brought forward its rate hike forecast from September to July 2026, as the MPC consensus points toward imminent tightening.
• 3.The Middle East conflict is expected to push headline inflation to a peak of 4.3% in the September 2026 quarter.

Table of Contents

• A Hawkish Hold
• Full text of today's RBNZ OCR Review
• Media release
• Summary record of meeting – May 2026
• Conflict in the Middle East is disrupting global supply chains
• Trading partner inflation is increasing
• The New Zealand economy was recovering prior to the conflict
• Near-term inflation is expected to increase and economic growth to weaken
• Financial conditions have tightened
• The Committee discussed risks to the inflation outlook
• The Committee voted to leave the OCR unchanged at 2.25 percent
• Attendees
• Contact Details

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