Key facts
- Kiwibank expects the RBNZ to begin hiking interest rates in July.
- The RBNZ held the OCR at 2.25% on a 3:3 split vote.
- External RBNZ members pushed for hikes, while internal members opted to hold.
- Wholesale markets price over 90% probability of a rate hike in July.
- Three rate hikes are priced by the RBNZ by year-end, reaching around 3.02%.
The Reserve Bank of New Zealand (RBNZ) faces a delicate balancing act as it navigates persistent inflation, largely driven by global oil prices, while the domestic economy shows signs of weakness. The central bank's decision on interest rates has significant implications for economic growth and inflation control. Analysts are closely watching for signs of overtightening, which could push the already fragile economy further into recession.