The Reserve Bank of New Zealand left its official cash rate/OCR unchanged at a record low of 1.5 percent at its June 2019 meeting, as widely expected. The move follows a 25 bps cut in the previous meeting. Policymakers said that a lower OCR may be needed over time given the downside risks around the inflation and employment outlook. Interest Rate in New Zealand averaged 7.36 percent from 1985 until 2018, reaching an all time high of 67.32 percent in March of 1985 and a record low of 1.75 percent in November of 2016.

Interest Rate in New Zealand is expected to be 1.50 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate Interest Rate in New Zealand to stand at 1.00 in 12 months time. In the long-term, the New Zealand Interest Rate is projected to trend around 1.75 percent in 2020, according to our econometric models.

New Zealand Interest Rate
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Calendar GMT Actual Previous Consensus TEForecast
2019-02-13 01:00 AM Interest Rate Decision 1.75% 1.75% 1.75% 1.75%
2019-03-27 01:00 AM Interest Rate Decision 1.75% 1.75% 1.75% 1.75%
2019-05-08 02:00 AM Interest Rate Decision 1.50% 1.75% 1.50% 1.5%
2019-06-26 02:00 AM Interest Rate Decision 1.5% 1.5% 1.5% 1.5%
2019-08-07 02:00 AM Interest Rate Decision 1.5% 1.25%
2019-08-07 03:00 AM RBNZ Press Conference
2019-09-25 02:00 AM Interest Rate Decision 1.25%



New Zealand Holds Rates at 1.5%, Signals Further Cuts

The Reserve Bank of New Zealand left its official cash rate/OCR unchanged at a record low of 1.5 percent at its June 2019 meeting, as widely expected. The move follows a 25 bps cut in the previous meeting. Policymakers said that a lower OCR may be needed over time given the downside risks around the inflation and employment outlook.

Statement from the Reserve Bank of New Zealand:

Domestic growth has slowed over the past year. While construction activity strengthened in the March 2019 quarter, growth in the services sector continued to slow. Softer house prices and subdued business sentiment continue to dampen domestic spending.

The global economic outlook has weakened, and downside risks related to trade activity have intensified. A number of central banks are easing their monetary policy settings to support demand. The weaker global economy is affecting New Zealand through a range of trade, financial, and confidence channels.

We expect low interest rates and increased government spending to support a lift in economic growth and employment. Inflation is expected to rise to the 2 percent mid-point of our target range, and employment to remain near its maximum sustainable level.

Given the downside risks around the employment and inflation outlook, a lower OCR may be needed.

Meanwhile, excerpts from the Summary Record of Meeting:

The Committee noted that inflation remains slightly below the mid-point of the inflation target and employment is broadly at its maximum sustainable level. The Committee agreed that a lower OCR may be needed to meet its objectives, given further deterioration in the outlook for trading-partner growth and subdued domestic growth.

The Committee discussed the ongoing weakening in global trade activity. A drawn out period of tension could continue to suppress global business confidence and reduce growth. Resolution of these tensions could see uncertainty ease.

The Committee discussed the trade, financial, and confidence channels through which slowing global growth and trade tensions affect New Zealand. The members noted in particular the dampening effect of uncertainty on business investment. Some members noted that lower commodity prices and upward pressure on the New Zealand dollar could see imported inflation remain soft.

While global economic conditions had deteriorated, the Committee noted that domestic GDP growth had held up more than projected in the March 2019 quarter. The members discussed disparities in growth across sectors of the economy, with construction strong and services weak. The members also discussed whether some of the factors supporting growth in the quarter would continue.

The Committee noted that recent softer house prices, if sustained, are likely to dampen household spending. The Committee also noted the recent falls in mortgage rates and the Government’s decision not to introduce a capital gains tax.

The Committee noted that Budget 2019 incorporated a stronger outlook for government spending than assumed in the May Statement. The members discussed the impact on growth of any increase in government spending being delayed, for example due to timing of the implementation of new initiatives and current capacity constraints in the construction sector.

The Committee discussed whether additional monetary stimulus was necessary given continued falls in global growth and subdued domestic demand. The members agreed that more support from monetary policy was likely to be necessary.

The Committee discussed the merits of lowering the OCR at this meeting. However, the Committee reached a consensus to hold the OCR at 1.5 percent. They noted a lower OCR may be needed over time.



RBNZ l Rida Husna | rida@tradingeconomics.com
6/26/2019 9:03:06 AM



New Zealand Money Last Previous Highest Lowest Unit
Interest Rate 1.50 1.50 67.32 1.50 percent [+]
Interbank Rate 1.65 1.70 24.25 1.65 percent [+]
Money Supply M0 6730.00 6790.00 213058.00 1081.00 NZD Million [+]
Money Supply M1 71541.00 72407.00 72407.00 1585.70 NZD Million [+]
Money Supply M3 312948.00 313888.00 313888.00 6726.00 NZD Million [+]
Foreign Exchange Reserves 29266.00 29229.00 32785.00 1029.50 NZD Million [+]
Banks Balance Sheet 564752.00 558816.00 564752.00 236047.00 NZD Million [+]
Deposit Interest Rate 1.71 1.74 16.32 1.50 percent [+]
Loans To Private Sector 115730.00 115893.00 115893.00 34958.00 NZD Million [+]
Central Bank Balance Sheet 26696.00 27665.00 36050.00 7116.00 NZD Million [+]


New Zealand Interest Rate

In New Zealand, interest rates decisions are taken by the Reserve Bank of New Zealand. The official interest rate is the Official Cash Rate (OCR). The OCR was introduced in March 1999 and is reviewed eight times a year by the Bank. The OCR influences the price of borrowing money in New Zealand and provides the Reserve Bank with a means of influencing the level of economic activity and inflation. This page provides - New Zealand Interest Rate - actual values, historical data, forecast, chart, statistics, economic calendar and news. New Zealand Interest Rate - actual data, historical chart and calendar of releases - was last updated on July of 2019.

Actual Previous Highest Lowest Dates Unit Frequency
1.50 1.50 67.32 1.50 1985 - 2019 percent Daily




Country Last Previous
Argentina 58.71 Jul/19
Turkey 24.00 Jun/19
Mexico 8.25 Jul/19
Russia 7.50 Jun/19
Brazil 6.50 Jun/19
South Africa 6.50 Jul/19
India 5.75 Jul/19
Indonesia 5.75 Jul/19
China 4.35 Jun/19
Saudi Arabia 3.00 Jun/19
United States 2.50 Jun/19
Canada 1.75 Jul/19
Singapore 1.67 Jun/19
South Korea 1.50 Jul/19
Australia 1.00 Jul/19
United Kingdom 0.75 Jun/19
Euro Area 0.00 Jun/19
France 0.00 Jun/19
Germany 0.00 Jun/19
Italy 0.00 Jun/19
Netherlands 0.00 Jun/19
Spain 0.00 Jun/19
Japan -0.10 Jun/19
Switzerland -0.75 Jun/19


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