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July 8, 2026
The Reserve Bank of New Zealand raised its benchmark interest rate for the first time in more than three years to bring inflation to target.
The Monetary Policy Committee, governed by Anna Breman, decided to lift the Official Cash Rate by 25 basis points to 2.50%. This was the first hike since May 2023. The bank has lowered its benchmark rate by 325 basis points since August 2024, bringing it to the lowest since mid-2022.
"A 25-basis point OCR increase was considered consistent with the mandate of ensuring low and stable inflation, while avoiding unnecessary instability in output, employment, interest rates, and the exchange rate," the bank said in a statement.
This was largely due to lower oil prices and reduced pass-through to other consumer prices. The committee emphasized that the outlook for medium-term inflation pressures depends on the extent to which recent cost increases feed through into higher prices.
"With inflation still above target and economic activity expected to strengthen, some further reduction in monetary stimulus is likely to be required to return inflation to the 2% target midpoint," the bank said. 07/08/2026 - 01:42:00 (RTTNews)
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