New Zealand’s Reserve Bank is widely anticipated to cut interest rates this week, potentially paving the way for further reductions in 2026 if the nation’s economy fails to gain traction. According to a Bloomberg survey, 21 out of 24 economists predict the Monetary Policy Committee will lower the official cash rate (OCR) by 25 basis points to 2.25 per cent at its meeting this Wednesday in Wellington. Two economists forecast a more aggressive cut to 2 per cent, while one expects no change.
Slower economic growth, driven by weak immigration and a soft housing market, has already prompted the RBNZ to cut rates more than initially projected, including a 50-point reduction last month. Although most economists believe this week’s reduction will be the last, policymakers may require more evidence of a significant upswing before halting the easing cycle.
According to Nick Tuffley, chief economist at ASB Bank in Auckland, “Tentative green shoots are emerging” and “we anticipate the economy will show more convincing signs of recovery.” He added, “Our base case is that November will bring the last OCR cut, but the risk remains for further easing in 2026.”
The RBNZ is New Zealand’s central bank responsible for maintaining price stability and promoting sustainable economic growth. The central bank will publish its decision at 2pm local time Wednesday (12pm AEDT), accompanied by updated economic forecasts. Governor Christian Hawkesby will hold a press conference at 3pm, marking his last in the acting role. Sweden’s Anna Breman will replace him on December 1. This is also the final decision for the year, with the next MPC meeting scheduled for February 18.
