Reserve Bank of New Zealand keeps rates on hold but signals further hikes

The Reserve Bank of New Zealand surprised markets by unexpectedly holding its official cash rate at 2.75%, against widely expected 25 basis points hike on Oct 28 policy meeting but signaled that the door for further tightening remains open and will be depending on the economic outlook.

The decision was result of tight 4-3 vote, suggesting that RBNZ policymakers’ stance on monetary policy remains hawkishly aligned, following rate hikes in two previous meetings concerned about inflation holding above central bank’s 1%-3% target range.

At a press conference after the meeting, RBNZ Governor Anna Breman said that monetary policy committee expects to see further official cash rate increases in coming months and that rate hikes might be higher than initially estimated.

Today’s decision comes just days ahead of general election in which the outlook for the economy and inflation remains a key issue for voters which will primarily focus on rising cost of living, after economic recovery from the second half of 2025 stalled due to strong rise in energy that impacted all sectors of the economy.