Reserve Bank of New Zealand leaves it cash rate at 5.5%, as widely expected

Reserve Bank of New Zealand monetary policy decision for April 2024.

  • Committee is confident that maintaining the OCR at a restrictive
    level for a sustained period will return consumer price inflation to
    within the 1 to 3 percent target range this calendar year

i.e Higher for longer!!!

more to come


  • The New Zealand economy continues to evolve as anticipated by the
    monetary policy committee
  • A restrictive
    monetary policy stance remains necessary to further reduce
    capacity pressures and inflation.
  • Economic growth in
    New Zealand remains weak

From the minutes of the meeting:

  • Members agreed they remain confident that monetary policy is
    restricting demand
  • Restrictive monetary
    policy is contributing to an easing in capacity pressures to ensure
    inflation returns to target
  • Further decline in
    capacity pressure is expected, supporting an ongoing decline in
  • Members agreed they
    remain confident that monetary policy is restricting demand
  • Measures of business
    confidence have declined and firms’ own expectations for activity
    and investment have weakened
  • Near-term business
    pricing intentions have declined but remain elevated, in part
    reflecting an uptick in both realised and expected costs.
  • Continued strength
    in net migration, is supporting aggregate consumer spending and
    rising dwelling costs
  • The committee agreed
    that interest rates need to remain at a restrictive level for a
    sustained period
  • Members agreed that
    the balance of risks was little changed since the February
  • Members agreed that
    there remains limited tolerance to increase the time to achieve the
    inflation target while inflation remains outside the target band and
    while inflation expectations and pricing intentions remain elevated
  • Members agreed that
    persistence of services inflation remains a risk and goods price
    inflation remains elevated
  • Ongoing restrictive
    monetary policy in an environment of weak global growth could lead to
    a more rapid decline in inflation than expected

NZD/USD popped higher on the announcment

Background to this:

This article was written by Eamonn Sheridan at Source