Responses to the RBNZ continue – more, higher, faster cash rate hikes ahead

KiwiBank characterise today’s moves by the Reserve Bank of New Zealand as a hawkish hike and forecast an additional two hikes.

In brief:

  • As expected, the RBNZ lifted the cash rate 25bps to 1% today. The path for interest rates is clearly higher as the bank faces into rising inflation.
  • The RBNZ’s forecasts were upgraded following several positive surprises. The path for interest rates was also upgraded, with much more tightening to come. The new OCR track has pulled forward expected hikes and lifted the end point to 3.4%, from 2.6% (that’s big). We now see the RBNZ hiking to 3% in 2023.

  • We continue to expect the RBNZ to hike the cash rate at each meeting in 2022. We see the OCR at 2.50% by November. We have, however, added two more rate hikes to 3% in 2023 .


  • “All up, the RBNZ’s forecasts were hawkish”
  • “The statement showed a need to lean much harder against inflation than in the November statement, and with some added concern expressed about the risk of high inflation becoming embedded”

The Reserve Bank of New Zealand does not pussy-foot around:

RBNZ Orr chuck norris meme


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