Reserve Bank of New Zealand monetary policy interest rate cut for February 2025
Statement highlights, Headlines via Reuters:
OCR 3.75% - OCR reduced further as inflation abates
Annual consumer price inflation remains near the midpoint of the Monetary Policy Committee's 1 to 3 percent target band
New Zealand's Reserve Bank reduced OCR to 3.75%
RBNZ sees official cash rate at 3.45% in June 2025 (previously 3.83%)
RBNZ sees official cash rate at 3.1% in March 2026 (previously 3.43%)
RBNZ sees TWI NZD at around 67.5% in March 2026 (previously 69.5%)
RBNZ sees annual CPI at 2.2% by March 2026 (previously 2.3%)
RBNZ sees official cash rate at 3.1% in June 2026 (previously 3.32%)
RBNZ sees official cash rate at 3.1% in March 2028
RBNZ: Rates reduced further as inflation abates
RBNZ: If economic conditions continue to evolve, scope to lower OCR further in 2025
RBNZ: Committee has confidence to continue to lower rates
RBNZ: Economic activity remains subdued
RBNZ: Economy expected to recover over 2025
RBNZ: Having CPI close to middle of target band puts committee in best position to respond to future inflationary shocks
RBNZ: Consumer price inflation in New Zealand is expected to be volatile in the near term, due to a lower exchange rate and higher petrol prices
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And from the minutes to the meeting, that the bak release at the same time as the Statement:
- RBNZ Minutes: If economic conditions continue to evolve as projected, the committee has scope to lower the OCR further through 2025.
- RBNZ Minutes: Expectations of future inflation, the pricing intentions of firms, and the degree of spare productive capacity are consistent with the CPI inflation target being sustainably achieved.
- RBNZ Minutes: There is a risk of increased trade barriers and broader geoeconomic fragmentation.
- RBNZ Minutes: This provides the context and the confidence for the committee to continue lowering the OCR, and at a faster pace than projected in November.
- RBNZ Minutes: An increase in trade restrictions is likely to reduce economic activity in New Zealand.
- RBNZ Minutes: Timely indicators of economic activity, including a range of business surveys, have improved in recent months.
- RBNZ Minutes: While lower interest rates are expected to underpin a recovery in the domestic economy, the speed and timing of the recovery is uncertain.
- RBNZ Minutes: There is significant spare capacity in the economy, and slightly more than we had assumed in November.
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Background on this is here:
- NZIER RBNZ Shadow Board recommends OCR cut by 50bp on February 19
- Newsquawk Week Ahead: RBA, RBNZ, FOMC Minutes, PMIs, Canada, UK and Japan inflation
- Reserve Bank of New Zealand (RBNZ) expected to cut reduce interest rates by 50bp on Feb 19
- New Zealand inflation expectations remained subdued in Q1 2025
- Reserve Bank of New Zealand inflation expectations: 1yr 2.15% (prior 2.05) 2yr 2.06 (2.12)
- Reserve Bank of New Zealand preview - likely the final 50bp interest rate cut
- ANZ says NZ jobs data don’t stand in the way of RBNZ 50bp cut at meeting on 19 February
