NZ Monetary Policy Statement - November 2025

Annual consumers price inflation increased to 3 percent in the September quarter. However, with spare capacity in the economy, inflation is expected to fall to around 2 percent by mid-2026. Economic activity was weak over mid-2025 but is picking up. Lower interest rates are encouraging household spending, and the labour market is stabilising. The exchange rate has fallen, supporting exporters’ incomes. Global economic growth has benefited from strong AI-related investment but is expected to slow in 2026 as trade barriers weigh on activity. Risks to the inflation outlook are balanced. Greater caution on the part of households and businesses could slow the pace of New Zealand’s economic recovery. Alternatively, the recovery could be faster and stronger than expected if domestic demand proves more responsive to lower interest rates. The Committee voted to reduce the OCR by 25 basis points to 2.25 percent. Future moves in the OCR will depend on how the outlook for medium-term inflation and the economy evolve. RBNZ: LOWER INTEREST RATES ARE ENCOURAGING HOUSEHOLD SPENDING, AND THE LABOUR MARKET IS STABILISING RBNZ SEES OFFICIAL CASH RATE AT 2.25% IN MARCH 2026 (PVS 2.55%) Looks like a hawkish cut RBNZ: Inflation likely to fall to near 2% by mid-2026, supported by spare economic capacity. RBNZ minutes show the committee voted 5-1 to cut the OCR by 25 bps to 2.25%. RBNZ: After a weak mid-2025, the economy is beginning to gain momentum.

The Consumer Price Index (CPI) rose 3.8% in the 12 months to October 2025, up from 3.6% in the 12 months to September 2025. The largest contributors to annual inflation were ...

The Bank of Japan is preparing markets for a possible interest rate hike as soon as next month, sources say, reviving previous hawkish language as worries about sharp yen declines return and political pressure for the bank to keep rates low fades. A change in BOJ messaging over the past week has shifted focus back to inflationary risks of a weak yen from earlier worries about the U.S. economy, comments aimed at reminding markets a December rate hike was still a prospect, two people familiar with the bank's thinking told Reuters. The pivot back to a hawkish footing also follows a key meeting between Prime Minister Sanae Takaichi and BOJ Governor Kazuo Ueda last week, that appeared to remove immediate political objections to rate hikes from the new administration. To be sure, the decision to raise rates in December or hold until January remains a close call with the U.S. Federal Reserve's rate decision - which comes a week before the BOJ's - seen swaying yen moves, said one of the sources. However, recent remarks from various officials includin BOJ may raise rates in December or delay until January, as it signals markets to expect a potential hike, according to sources.