New Zealand Interest Rate

The Reserve Bank of New Zealand held its official cash rate (OCR) at 5.5% during its policy meeting in April 2024, extending the rate pause for the sixth time and confirming market expectations. Policymakers noted that the current monetary policy stance was appropriate to further reduce capacity pressures and inflation. While the country’s headline inflation slowed to a two-and-a-half-year low of 4.7% in Q4 of 2023, it remained well above the target level of 1% to 3%. The committee believed that the OCR needed to stay at a restrictive level for an extended period to facilitate the return of annual consumer inflation to the target range. Meanwhile, the GDP for the December 2023 quarter showed that the economy remained weak but was closely aligned with expectations, indicating a sustained alleviation of capacity pressures. Some higher frequency indicators also hint at a slight uptick in activity during the Q1 of 2024.