- The New Zealand Reserve Bank is expected to maintain its key interest rate at 3.25% on Wednesday.
- The RBNZ hinted that it is close to the end of the relaxation cycle since “inflation is within the target range.”
- The New Zealand dollar could experience a great reaction to language in the RBNZ policy declaration.
HE expects the New Zealand Reserve Bank (RBNZ) After the conclusion of its July monetary policy meeting on Wednesday.
The decision will be announced at 02:00 GMT. This time, the announcement will not be accompanied by the Monetary Policy Declaration (MPS) and followed by the Press Conference of the Interim Governor of the RBNZ, Christian Hawkesby.
Therefore, Language in policy review will be examined closely In search of new clues about the state of the RBNZ relaxation cycle, which could significantly impact the performance of the New Zealand dollar (NZD).
What to expect from the RBNZ interest rate decision?
The May Declaration of the RBNZ policy indicated that The bank is close to the end of its rate cuts cycle that began in August 2024. The Kiwi Central Bank has cut rates in a total of 225 basic points (PBS) since then.
In the statement, the RBNZ said that inflation is within the target range and that the OCR is close to its neutral range between 2%-4%.
The RBNZ also pointed out that “the complete economic effects of the cuts in the OCR since August 2024 have not yet been completely carried out,” adding that economic uncertainty remains high due to US tariffs.
In addition, the inflation of the New Zealand consumer price index (CPI) and the Gross Domestic Product (GDP) exceeded expectations in the first quarter (Q1).
The New Zealand CPI rose 2.5% year -on -year in the Q1, accelerating from the 2.2% increase seen in the Q4 of 2024 and an expected growth of 2.3%. Meanwhile, the GDP of the island nation increased by 0.8% in the quarter of March compared to the previous three months, faster than the forecasts of an increase of 0.7%.
In this context, The RBNZ might prefer to stand firmwaiting for the inflation and employment data of the second quarter for a new economic evaluation before the August 19 policy meeting. Industry experts await the next RBNZ rate reduction in August.
How will the RBNZ interest rate impact on the New Zealand dollar?
The NZD/USD is in corrective mode from nine months 0.6121 reached a week ago. The fall of the Kiwi is sponsored by the renewed attraction of a safe refuge of the US dollar (USD) amid new fears of tariff war and persistent tax concerns in the US.
The torque could extend its setback if the RBNZ leaves the door ajar for an additional cuts of rates this year while recognizing the emerging risks of commercial uncertainty abroad.
On the contrary, the NZD could resume its upward trend if the RBNZ explicitly indicates the end of its relaxation cycle amid the improvement of economic perspectives and the general achievement of its inflation objective.
Dhwani Mehta, leading analyst of the Asian session at FXSTERET, offers a brief technical perspective for the NZD/USD and explains:
“The Kiwi torque has found support in the single mobile medium (SMA) criticism of 50 days at 0.5988, while the 14 -day relative force index (RSI) seeks 0.6150. “
“If the 50 -day SMA support yields, a pronounced drop towards the 100 -day SMA can not be ruled out at 0.5876. Additional falls will point to the 200 -day SMA at 0.5848,” Dhwani adds.
Economic indicator
RBNZ interest rates
He New Zealand Reserve Bank (RBNZ) announces its decision on the interest rate after each of its seven annual policy meetings. If the RBNZ adopts a hard line posture and observes that inflationary pressures are increasing, the official cash (OCR) rate increases to reduce inflation. This is positive for the New Zealand dollar (NZD), since higher interest rates attract more capital tickets. Similarly, if it concludes that inflation is too low, it reduces OCR, which tends to weaken the NZD.
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Next publication:
LIÉ JUL 09, 2025 02:00
Frequency:
Irregular
Dear:
3.25%
Previous:
3.25%
Fountain:
Reserve Bank of New Zealand
The New Zealand Bank Reserve (RBNZ) celebrates monetary policy meetings seven times a year, announcing its decision on interest rates and economic evaluations that influenced their decision. The Central Bank offers clues about economic perspectives and the future path of politics, which are of high relevance for the assessment of the NZD. Positive economic developments and an optimistic perspective could lead the RBNZ to harden policy by increasing interest rates, which tends to be bullish for the NZD. Policy ads are usually followed by the press conference of interim governor Christian Hawkesby.
RBNZ – Frequently Questions
The New Zealand Reserve Bank (RBNZ) is the Central Bank of the country. Its economic objectives are to achieve and maintain the stability of prices – won when inflation, measured by the consumer price index (CPI), falls within the range of between 1% and 3% – and support the maximum sustainable employment.
The Monetary Policy Committee (MPC) of the New Zealand Reserve Bank (RBNZ) decides the appropriate level of the official cash rate (OCR) according to its objectives. When inflation is above the objective, the bank will try to control it by raising its key, making money borrowing for homes and companies and cooling the economy. The highest interest rates are generally positive for the New Zealand dollar (NZD), since they generate greater returns, which makes the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken the NZD.
Employment is important for the New Zealand Reserve Bank (RBNZ) because an adjusted labor market can feed inflation. The objective of the “maximum sustainable employment” is defined as the greatest use of labor resources that can be maintained over time without creating an acceleration of inflation. “When employment is at its sustainable maximum level, there will be low and stable inflation. However, if employment is above the sustainable maximum level for too long, it will eventually cause prices to increase more and more quickly, which will require the MPC to increase interest rates to maintain inflation under control,” says the Central Bank.
In extreme situations, the New Zealand Reserve Bank (RBNZ) can implement a monetary policy tool called quantitative flexibility. The QE is the process by which the RBNZ prints local currency and uses it to buy assets (generally government or corporate bonds) of banks and other financial institutions with the objective of increasing the internal money supply and stimulating economic activity. The qe generally results in a neo -Zealand dollar (NZD) weaker. The QE is a last resort when it is unlikely that simply lowering interest rates achieve the objectives of the Central Bank. The RBNZ used it during the Covid-19 Pandemia.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
