New Zealand Central Bank Surprises Markets With Rate Hold — Update
By James Glynn
SYDNEY--The Reserve Bank of New Zealand held interest rates steady at a policy meeting on Wednesday, surprising financial markets that had priced in a near-certain hike.
The monetary policy committee voted 4 to 3 to hold the cash rate steady at 2.75%, but RBNZ Gov. Anna Breman said that further rate hikes were likely.
Financial markets had put the probability of a hike at 95%.
"We do think that we will see further OCR increase because of what we are seeing in inflation," Breman told reporters.
The central bank would likely consider another hike in December, when it will present a fresh batch of economic forecasts, Breman added.
For now, with two rate increases already working through the economy, the RBNZ has time to assess incoming economic data and consider its options.
Breman said November's election wasn't a factor in the decision to hold interest rates steady. Polls are suggesting the election will be closely contested.
New Zealand's economy is showing signs of recovery, but unemployment remains near its highest level in 11 years and growth is uneven.
Global risks, such as the unresolved war in the Middle East, and fresh inflation data are likely to be critical to the RBNZ decisions in the coming weeks, Breman added.
Write to James Glynn at james.glynn@wsj.com
(END) Dow Jones Newswires
October 27, 2026 23:22 ET (03:22 GMT)
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