The Reserve Bank of New Zealand (RBNZ) has indicated that its current projections align with a 50 basis points (bps) hike in February, conditional on economic activity. Governor Adrian Orr underscored this stance following the central bank’s decision to maintain the official cash rate at 5.5%, reinforcing the focus on inflation and labor market dynamics.
Orr highlighted that economic activity and inflation trends will be pivotal in determining whether the projected rate hike materializes. While inflation pressures show signs of easing, strong employment figures and robust demand continue to warrant caution. The central bank remains vigilant, balancing economic stability with the risk of tightening financial conditions further.
This positioning marks a continuation of the RBNZ’s measured approach, offering clarity for markets while leaving room for adjustments should economic indicators shift significantly.
