Reserve Bank of New Zealand’s (RBNZ) acting Governor Christian Hawkesby presents the prepared remarks on the policy statement and responds to media questions at the press conference after the May monetary policy announcement.

Following its May policy meeting, the RBNZ delivered a 25 basis points (bps) cut to the Official Cash Rate (OCR) from 3.5% to 3.25%, as widely expected.

RBNZ press conference key quotes

Inflation is in the target range.

Did form a consensus projection for the cash rate, but high degree of uncertainty.

Rates are in the neutral zone.

Key message is that we have come a long way, not pre-programmed on moves now.

Committee members were comfortable with projection on rates, a difference on timing.


Economic Indicator

RBNZ Press Conference

Following the Reserve Bank of New Zealand's (RBNZ)monetary policy decision, the Governor gives a press conference explaining the rationale behind the decision. The comments may influence the volatility of the New Zealand Dollar (NZD) and determine a short-term positive or negative trend.

Read more.

Next release: Wed May 28, 2025 03:00

Frequency: Irregular

Consensus: -

Previous: -

Source: Reserve Bank of New Zealand

The Reserve Bank of New Zealand (RBNZ) holds monetary policy meetings seven times a year, announcing their decision on interest rates and the economic assessments that influenced their decision. The central bank offers clues on the economic outlook and future policy path, which are of high relevance for the NZD valuation. Positive economic developments and upbeat outlook could lead the RBNZ to tighten the policy by hiking interest rates, which tends to be NZD bullish. The policy announcements are usually followed by interim Governor Christian Hawkesby’s press conference.

This section below was published at 02:00 GMT following the Reserve Bank of New Zealand (RBNZ) policy announcements.

The Reserve Bank of New Zealand (RBNZ) announced on Wednesday that it cut the Official Cash Rate (OCR) by 25 basis points (bps) to 3.25% from 3.5% after concluding the May policy meeting.

The decision came in line with the market expectations.

The RBNZ lowered the policy rate for the sixth consecutive meeting.

Summary of the RBNZ Monetary Policy Statement (MPS)

Inflation within target band.

Core inflation is declining.

Spare capacity in economy.

Well placed to respond to domestic and international developments.

Both tariffs and policy uncertainties overseas to moderate recovery.

Conditions are consistent with inflation returning to the mid-point of the 1 to 3 percent target band over the medium term.

Minutes of the RBNZ interest rate meeting

Inflation is within the target band, and the committee is well placed to respond to both domestic and international developments to maintain price stability over the medium term.

The committee agreed on the projected central path for the OCR.

A 25 basis point decline in the ocr was seen as consistent with medium-term price stability.

Committee noted that the full economic effects of cuts in the OCR since august 2024 are yet to be fully realised.

In addition to the uncertain scale and duration of tariff policies, it is unclear how these will transmit to the New Zealand economy.

By a majority of 5 votes to 1, the committee agreed to decrease the OCR by 25 basis points from 3.50 percent to 3.25 percent.

Announced increase in us tariffs will lower global demand for new zealand’s exports.

RBNZ updated economic forecasts

RBNZ sees official cash rate at 3.12% in September 2025 (pvs 3.23%).

RBNZ sees official cash rate at 2.87% in June 2026 (pvs 3.1%).

 RBNZ sees twi nzd at around 69.0% in June 2026 (pvs 67.5%).

RBNZ sees annual CPI 1.9% by June 2026 (pvs 2.2%).

RBNZ sees official cash rate at 3.1% in June 2028.

RBNZ sees official cash rate at 2.9% in September 2026 (pvs 3.1%).

NZD/USD reaction to the RBNZ interest rate decision

The New Zealand Dollar trims losses in an immediate reaction to the RBNZ interest rate decision. The NZD/USD pair currently trades at 0.5945, down 0.12% on the day. 

New Zealand Dollar PRICE Today

The table below shows the percentage change of New Zealand Dollar (NZD) against listed major currencies today. New Zealand Dollar was the weakest against the Swiss Franc.

  USD EUR GBP JPY CAD AUD NZD CHF
USD   0.14% 0.12% -0.01% 0.12% 0.26% 0.07% 0.04%
EUR -0.14%   0.02% -0.11% -0.02% 0.13% -0.03% -0.05%
GBP -0.12% -0.02%   -0.12% 0.00% 0.13% 0.28% -0.04%
JPY 0.01% 0.11% 0.12%   0.09% 0.24% 0.10% 0.14%
CAD -0.12% 0.02% -0.01% -0.09%   0.15% 0.00% -0.05%
AUD -0.26% -0.13% -0.13% -0.24% -0.15%   0.17% -0.17%
NZD -0.07% 0.03% -0.28% -0.10% -0.00% -0.17%   -0.34%
CHF -0.04% 0.05% 0.04% -0.14% 0.05% 0.17% 0.34%  

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the New Zealand Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent NZD (base)/USD (quote).

This section below was published on Tuesday at 21:15 GMT as a preview of the Reserve Bank of New Zealand (RBNZ) interest rate decision.

  • The Reserve Bank of New Zealand is expected to trim interest rate by 25 bps to 3.25% on Wednesday.
  • A rate cut in May is fully priced; RBNZ updated forecasts, acting Governor Hawkesby’s presser eyed.
  • The RBNZ's policy announcements are set to ramp up the volatility around the New Zealand Dollar.

The Reserve Bank of New Zealand (RBNZ) is widely expected to lower the Official Cash Rate (OCR) by 25 basis points (bps) to 3.25% from 3.50% after concluding its May monetary policy meeting on Wednesday. The decision will be announced at 02:00 GMT and will be followed by acting RBNZ Governor Christian Hawkesby’s press conference at 03:00 GMT.

The New Zealand Dollar (NZD) is likely to experience intense volatility on the RBNZ policy announcements and a fresh set of quarterly economic projections.

What to expect from the RBNZ interest rate decision?       

With an interest rate cut fully locked in, all eyes will remain on the OCR forecasts published in the Monetary Policy Statement (MPS) for further hints on the RBNZ’s path forward on interest rates.

The February MPS suggested the OCR track at 3.1% by the first quarter of 2026.

Since then, US tariff developments and uncertainty over the global economic outlook have increased the downside risks to New Zealand’s growth prospects.

Therefore, a downward revision to the OCR track to sub-3% wouldn’t surprise markets. Markets are currently pricing in a 60% chance that the RBNZ will drop the OCR to 2.75% by the end of the year, per Herald NZ. 

In the April policy statement, the central bank noted, “as the extent and effect of tariff policies become clearer, the Committee has scope to lower the OCR further as appropriate.”

“Future policy decisions will be determined by the outlook for inflationary pressure over the medium term,” the statement read.

Inflation, as measured by the Consumer Price Index (CPI), rose 2.5% YoY in the first quarter (Q1), compared with the 2.2% increase seen in Q4 2024, according to the latest data published by Statistics New Zealand on April 16. The reading beat the estimates of a 2.3% rise.

The latest RBNZ monetary conditions survey showed that New Zealand's (NZ) two-year inflation expectations rose to 2.29% in Q2 from 2.06% in Q1.

Even though the central bank has left the door open for further rate cuts, elevated inflation levels could raise questions about the timing of the next rate cut, which could happen either in July or August.  

In that light, the RBNZ could switch to the data-dependency mode amid lingering uncertainty over US tariff policies.  

How will the RBNZ interest rate decision impact the New Zealand Dollar?

The NZD/USD pair hit year-to-date (YTD) highs above the 0.6000 threshold on Monday in the countdown to the RBNZ event risk. The continued US Dollar (USD) weakness due to domestic fiscal concerns and US President Donald Trump’s tariffs helps the pair stretch higher.

The Kiwi pair could witness a profit-booking decline if the RBNZ explicitly signals another rate cut in July while acknowledging downside risks to the economic outlook.

Additionally, a downgrade to the OCR track for this year and the first quarter of 2026 could be clearly read as dovish, weighing heavily on the New Zealand Dollar.

On the other hand, the NZD could see the extension of the ongoing upward trajectory if the RBNZ hints at a pause in the next meeting amid concerns over sticky inflation.  

Dhwani Mehta, Asian Session Lead Analyst at FXStreet, offers a brief technical outlook for NZD/USD and explains:

“Risks appear skewed to the upside for the NZD/USD pair as the 14-day Relative Strength Index (RSI) stays well above the midline. Buyers need acceptance above the 0.6000 round level for a sustained uptrend. Further up, the October 21 high of 0.6085 will be tested en route to the 0.6150 psychological barrier.”

“If the corrective decline from 2025 highs gathers steam, the initial support is aligned at the 21-day Simple Moving Average (SMA) at 0.5931, below which the 200-day SMA at 0.5877 will be threatened. On an extended downside, the line in the sand for buyers is seen at the 50-day SMA at 0.5853,” Dhwani adds.  

RBNZ FAQs

The Reserve Bank of New Zealand (RBNZ) is the country’s central bank. Its economic objectives are achieving and maintaining price stability – achieved when inflation, measured by the Consumer Price Index (CPI), falls within the band of between 1% and 3% – and supporting maximum sustainable employment.

The Reserve Bank of New Zealand’s (RBNZ) Monetary Policy Committee (MPC) decides the appropriate level of the Official Cash Rate (OCR) according to its objectives. When inflation is above target, the bank will attempt to tame it by raising its key OCR, making it more expensive for households and businesses to borrow money and thus cooling the economy. Higher interest rates are generally positive for the New Zealand Dollar (NZD) as they lead to higher yields, making the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken NZD.

Employment is important for the Reserve Bank of New Zealand (RBNZ) because a tight labor market can fuel inflation. The RBNZ’s goal of “maximum sustainable employment” is defined as the highest use of labor resources that can be sustained over time without creating an acceleration in inflation. “When employment is at its maximum sustainable level, there will be low and stable inflation. However, if employment is above the maximum sustainable level for too long, it will eventually cause prices to rise more and more quickly, requiring the MPC to raise interest rates to keep inflation under control,” the bank says.

In extreme situations, the Reserve Bank of New Zealand (RBNZ) can enact a monetary policy tool called Quantitative Easing. QE is the process by which the RBNZ prints local currency and uses it to buy assets – usually government or corporate bonds – from banks and other financial institutions with the aim to increase the domestic money supply and spur economic activity. QE usually results in a weaker New Zealand Dollar (NZD). QE is a last resort when simply lowering interest rates is unlikely to achieve the objectives of the central bank. The RBNZ used it during the Covid-19 pandemic.

Source: Fxstreet