New Zealand Central Bank Expected to Hold OCR at 2.25%, Signal 2-3 Rate Hikes in 2026

According to Westpac, the Reserve Bank of New Zealand today is expected to hold its Official Cash Rate (OCR) at 2.25% unchanged as the central bank weighs inflation pressures against economic slowdown risks.

Overall inflation in New Zealand is forecast to breach 4% driven by surging fuel prices following Iran conflict escalation, remaining elevated for most of 2026. Economic growth projections have been sharply cut, with 2026 GDP growth estimated at 1.8%-2.0% compared to 2.8% forecast in February. Unemployment is expected to rise to around 5.5% by year-end. Westpac forecasts the OCR terminal rate at approximately 3.2%, implying 2-3 rate hikes throughout 2026, with the December OCR projection around 2.8%.