The Reserve Bank of New Zealand is widely expected to cut its official cash rate by 25 basis points to 3% at its policy meeting on August 20, as easing inflation and a softening labour market bolster the case for further stimulus.
- A Reuters poll conducted August 11–14 found 28 of 30 economists forecasting the move, with just two expecting no change.
The central bank last held rates at 3.25% in July, flagging a readiness to ease if inflation stayed in check. Annual inflation slowed to 2.7% in the June quarter — within the RBNZ’s 1–3% target range — while the jobless rate rose to 5.2%, the highest since late 2020.
Economists see next week’s cut as part of the final phase of the RBNZ’s easing cycle, though expectations for the terminal rate vary.
- ASB and Westpac expect no further cuts after August,
- while BNZ tips a move to 2.75% by end-2025
- and ANZ and Kiwibank forecast 2.50% next year.
The median forecast points to an additional cut to 2.75% in Q1 2026, slightly earlier than predicted in July.
This article was written by Eamonn Sheridan at investinglive.com.