Reserve Bank to make official cash rate announcement today, Reserve Bank of New Zealand (file photo). Report 5 May - FSR Media conference & October. Flexibility option - Option to shift dates But it also shows that monetary policy moves to date are getting the intended traction via the housing market. ads. To be sure, if the situation changes for the worse, then the RBNZ has options to maintain current settings for longer or even lower borrowing costs to support the economy. Advice HQ founder and financial adviser David Green (pictured above right), said the RBNZ remained in catch-up mode as high inflation stayed in play, as confirmed by recent releases on unemployment rates and wage growth. If the economy slows down, the cash rate may be cut to support increased borrowing and spending and boost economic growth. Inflation expectations are far too high. The RBNZ needs to be mindful of how quickly they went up as we navigate the impact of existing changes still washing through, Bolton said. The release dates in full for the period until July 2022 are: Both ASB and ANZ believe the OCR will begin to rise from August 2022. The RBNZ today opted to maintain monetary policy settings and keep the official cash rate at 0.25%. L3, Suite 301, At best, it has plateaued around 7.2% which leaves a substantial gap to the current OCR. If you're already a Supporter, please use the Or, your browser is blocking ad display with its settings. day after the monetary policy announcement. Achilles House Central bank will make OCR announcement this week. That may have a bigger impact on the housing market than what would be desirable, the bank said. Nikko Asset Management New Zealands head of equities Stu Williams on the week ahead. Your rate wont rise as you locked it in, so you can relax a little. The central bank also temporarily removed the loan-to-value ratio (LVR) restrictions impacting borrowers and borrowing costs. The central bank's latest announcement was notable for its lack of changes, but the RBNZ dropped wording around being "willing to cut" the official cash rate further. Because your rate is fixed for an agreed period, a decision by the RBNZ to hold wont have as much of an effect on you depending on how long you still have to go in your fixed term. Events calendar. One of the biggest challenges for people is the inflation rate. Inflation is now back above 3%, and we expect it to press higher over late 2021/early 2022. website. The inflation and employment data have turned slightly, but not to an emphatic degree, yet. When the RBNZ gets closer to actually changing the OCR setting, the upward pressure will come on the shorter terms and floating rates too.. New Zealand, 69% expect the cash rate to peak between 5% and 5.25% early this year, Half of Kiwis could only live off their savings for a month if they lost their job, All economists predicted another increase to the OCR in February, Formulate and implement monetary policy to maintain price stability and support maximum sustainable employment, Promote the maintenance of a sound and efficient financial system. However, this doesnt mean you have to do anything with your investment. New inflation figures out in the coming week are likely to show us having an annual rate of inflation in excess of 7% for the fourth consecutive quarter - but will there be signs that we can expect prices to start easing soon? Nikko Asset Management head of equities Stu Williams speaks with Kate McVicar. So, what is the OCR? credit card debit, $18.75 per user - Pay by monthly Carry out a quick comparison to make sure youre getting the best return on your money. Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search. The Reserve Bank has double-pumped the Official Cash Rate with its surprise 50 basis point hike in an effort to blindside the markets. Term deposit rate increases are starting to filter through although they are limp new offers with banks falling further behind the OCR policy signals, Weaker US PPI inflation, higher jobless claims play to theme of weaker US economy and moderating inflation pressures, adding in expectations of just one more Fed rate hike, USD remains under pressure; US Treasury yields slightly higher, The banks are demonstrating that they won't hike interest rates just because the Reserve Bank would like them to - so it might be better for the RBNZ to adopt more of a waiting game, US CPI rises just 0.1% m/m; core up 0.4% - strong enough to maintain expectations for another likely Fed hike next month. The 2021 Skip ahead to read the latest analysis, see how the OCR has changed over time and learn more about how the official cash rate affects you. There are two types of OCR announcement over the course of the year. "Were the RBNZ to hike 50 basis points in April, then we have little doubt the market would fully price a further 50 basis points for May and, most likely push the terminal rate through 4 percent.". If you decide to apply for a product or service through our website you will be dealing directly with the provider of that product or service and not with us. On 6 October, the Reserve Bank of New Zealand (RBNZ) released its Monetary Policy Review, announcing an increase in the Official Cash Rate (OCR) from 0.25% to 0.5%. ASB, ANZ, and BNZ also released their forecasts - expecting the OCR to reach 0.5% next month, according to Stuff.. ASB chief economist Nick Tuffley said the RBNZ had "clearly changed tack . 28 February 2022 Last modified date: 20 April 2023 Monetary Policy Statements and Financial Stability Reports Announcements and release dates We publish: all upcoming announcements relating to monetary policy decisions release dates for upcoming monetary policy statements and financial stability reports links to decisions and news releases. Kids are at school for just 8 days this month, but there are ways of coping, as Candice Harris from Auckland University of Technology explains. Reserve Bank Governor Adrian Orr has lifted the official cash rate (OCR) by 50 basis points, to 4.75 per cent, despite billions of damage the economy faces after Cyclone Gabrielle. Official Cash Rate announcements 24 February Fixed mortgage rates have largely priced in future OCR rises courtesy of banks wholesale fundings costs, so if the RBNZ keeps to the same playbook, we should only see floating rates rise., A flat yield curve indicates markets expect rates to flatten at some point in the future, so the Monetary Policy Statement (MPS) will determine if markets need to adjust these expectations and subsequently fixed rates. The OCR sets overnight interest rates banks pay, that in turn influences short term funding costs in the New Zealand economy. If you are unsure you should get independent advice before you apply for any product or commit to any plan. August, and November. OCR - Usually US Treasury yields fall post CPI but then reverses much of that price action, NZ's largest bank raises fixed and floating home loan rates, savings account rates, and term deposit rates in a broad response to the recent RBNZ OCR rises, Mortgage rates were unmoved by the RBNZs big hike as traders bet any increase now will be matched with a cut later, US Treasury yields push higher, ahead of key CPI data tonight. Discovery) - All Rights Reserved, By subscribing you agree to our Terms of Access and Privacy Policy, would be the largest increase to the OCR since May 2000, revealed in January that inflation in the year to December 2021, found inflation could be "moon-bound" giv. NZD re-tests sub-0.62 level, NZIER's Christina Leung explains how higher interest rates are impacting New Zealand businesses and why profits aren't driving inflation, BNZ's head of research says the RBNZ should have opted for a smaller Official Cash Rate rise and caution that further rate rises might be needed; approach taken 'will most definitely generate heightened volatility', Weaker US ADP employment and services ISM data push US Treasury yields lower. 2020 remain unchanged. He Tipu Ka Hua Fund Opens To Advance Mori-led Research, Counting Carbon - NZ Contributes To Global C02 Stocktake. "Next Wednesday looms as one of its more eagerly awaited OCR decisions. Copyright Squirrel Group Limited 2023. They said while New Zealand has had to tighten its purse strings, through increased interest rates, the domestic economy is in a good position to weather the global financial situation. If they dont pass on the full rate cut, ask for a rate discount, and if youre still not happy start comparing what other deals are in the market. ANZ is forecasting it could reach 7.4 percent in the second quarter of the year. Savers may be better off looking at challenger banks than the big banks, NZD/AUD recovers after strong Australian jobs report; NZD crosses recover, The Reserve Bank needs to show greater patience, NZD/AUD continues to drift lower and NZ/EUR falls to fresh two and a half year low, Backfire! Now that the October OCR increase is confirmed, and more increases are expected, it is likely to maintain the upwards pressure that have been on long term fixed mortgage rates all year, and could well lead to short term rate increases, including the variable mortgage rate. Usually fourth Wednesday in February, May, MPS and OCR reviews, and at 9am for FSRs on the dates listed And borrowers can lock in incredibly low long-term interest rates (around 3% to 3.7%) now if interest rate certainty over a longer period is of the utmost importance, the ASB economists wrote on the report. While we share the RBNZs view that the OCR will move up in 2022, their pace of hikes over the next few years is larger than what we envisage.". Check your spending, adjust your budget and expenses where possible. I believe the RBNZ will hike in February and April, and then pause. Find an account which offers the same features and fees but with a better rate. We think that's fair, because your organisation is benefiting from using our news resources. A timeline of our past monetary policy and Official Cash Rate (OCR) announcements. IMF downgrades forecasts. USD broadly stronger. Statistics New Zealand says the cost of living for households rose 7.7% in the year to March 2023, boosted by higher rents and interest payments and increased grocery food, fruit and vegetables prices, New Reserve Bank mortgage figures show homeowners paid close to $4 billion in interest during the March quarter, while total scheduled repayments topped $6 billion for the first time since the RBNZ started publishing this data, Softer than expected German CPI, GDP and Euro area GDP data drive German Bunds down 14-15bps. We are not a product issuer, credit provider or financial advisers nor are we a credit intermediary or broker. For each of the past five increases, the Reserve Bank (RBNZ) has hiked the OCR by 50 basis points. But Westpac's forecasts suggest the RBNZ would not cut the OCR until 2024. live-stream, If you're using Scoop for work, we ask that you or your organisation pay a small license fee with Scoop Pro. NZ curve flattens; market sees a good chance of easier policy in the second half, when the economy is likely to be deeper in recession. San Francisco-based First Republic is the third midsize bank to fail in two months. Optional, only if you want us to follow up with you. current guidelines. Bond traders are betting against the Reserve Bank, NZD shows notable underperformance, weaker on all the crosses, RBNZ's shock 50bps hike has back-fired; NZ rates mainly lower as market prices in eventual policy reversal, Of Interest Podcast: Profits not responsible for inflation, NZIER economist says, BNZ's Toplis: There was no need for the RBNZ to 'go like a bull at a gate', USD well supported on safe haven flows; NZD/USD fully reverses. According to the Kiwibank team, 60% of NZ mortgages are either floating or up for re-fixing in the next 3-6 months, while 80% will refix in the next 6-12 months. The key thing for borrowers is dont panic, Pope said. Based on ASB economists expectation that the OCR will peak 1.25% higher than the current levels (1.5%) in addition to assumptions about bank funding costs and inflation forecasts ASB economists expect mortgage interest rates to lift to levels around 1% to 3% higher than they are now by 2025. The RBNZ's next OCR announcement, and the last one for the year, is coming up on the 23 rd November. If they dont pass on the full rate cut, ask for a rate discount, and if youre still not happy start comparing what other deals are in the market.If the rate holdsCompare other variable-rate mortgages to make sure youre still getting the best deal. ANZ's Business Outlook in March found inflation could be "moon-bound" given that nearly all surveyed businesses expected higher costs in the coming months, which flows on to increases in prices for consumers. "For now, we are sticking to our call for a sequential path of 25bp hikes and a 2.75 percent early 2023 OCR peak. The RBNZ's assertive tightening to date is working, and the risk now is titled towards overtightening. 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If this figure is reasonable, you might want to consider comparing variable mortgages. If rates rise, savings accounts rates could increase as well. That's far beyond the Reserve Bank's objective of keeping inflation between 1 and 3 percent on average while also supporting maximum sustainable employment. See more of ASBs latest financial news and announcements here on our blog. The RBNZ has itself forecast (in its May Monetary Policy Statement) a peak in the OCR of just under 4% by the middle of next year. below. Search for our upcoming events here. But this time, one key thing is very, very different inflation.". Commentators only expect inflation to worsen given the Omicron outbreak and the war in Ukraine. "Normally, near-term downside growth risks are a recipe for at least caution on the part of central banks, if not outright largesse. As mentioned above, you still might want to monitor other deals in the market to keep informed.If the rate risesIf rates rise, savings accounts rates could increase as well. In fact, theyve been the lowest we have on our records going back to the 1960s. However next year plays out, well be watching closely - with plenty of commentary over on the Squirrel blog to help make sense of what the Reserve Bank announcements mean for Kiwi homeowners and our housing market. ads. The five-year term deposit rate has more than doubled, from 1% to over 2% (at the time of writing). In return, we'll give your team access to pro news tools and keep Scoop free for personal use, because we believe public access to news is important! But, with the NZ and global economic outlook having improved, long-term interest rates are moving higher sooner than we were predicting at the early stages of the recovery, and we expect this to continue. finder.com compares a wide range of products, providers and services but we don't provide information on all available products, providers or services. As a result, rates dropped to their lowest level on record, going back to the 1960s. arises with other important releases or events. Market implementation of the OCR will continue to be the working day after the monetary policy announcement. The release dates for The biggest problem at the moment is the government and mismanagement the management of the border has been a joke.. These will be published on the Reserve Bank's live-stream 3 November - FSR Media conference & What will this mean for you? finder.com is an independent comparison platform and information service that aims to provide you with the tools you need to make better decisions. The central bank's latest announcement was notable for its lack of changes, but the RBNZ dropped wording around being "willing to cut" the official cash rate further. These two factors signal the need to continue applying contractionary monetary policy. Analysts at CoreLogic said the outlook for interest rates remained stable for now, but borrowers may look to lock in longer-term rates, amid a growing expectation of higher interest rates in the next 18 months. While the election campaign might be a close run race, dont expect it to be packed full of transformative policies and big dreams for the future of the nation, Kiwi households still being hit hard by food and mortgage interest rate costs, The country's mortgage interest bill is continuing to hit high spots, BNZ sees signs of the economy rebalancing, Tim Hazledine on potential new tools to help with the inflation fight, NZ rates and NZD fall after big downside miss to NZ CPI, Seven's not heaven: Our enduring inflation woes. The Official Cash Rate, or OCR as its usually referred to, was cut to just 0.25% in March 2020 - the lowest its ever been. While we are independent, we may receive compensation from our partners for featured placement of their products or services. The growth assets like property and shares are influenced by the broad economic backdrop and that includes interest rates. MPS/OCR review dates will shift to, There are risks to raising the OCR in large increments, mostly with the housing market, ANZ said, but "the RBNZ now has to play the hand it's got". If those advocating for a CGT and other redistributive tax measures may be compared to a revolutionary band hiding out in the mountains, then Parkers reports are the equivalent of a bloody great ammunition dump! As mentioned above, you still might want to monitor other deals in the market to keep informed. The AA's Terry Collins says it's all about how drivers use their right foot. We recommend seeking professional investment and/or mortgage advice before taking any action. For the last few months, longer term fixed mortgage rates have already been lifting in line with wholesale interest rates. On 5 April 2023, we increased the OCR from 4.75% to 5.25%. USD rebounds on all that; US Treasury yields higher led by the front end. Squirrel Legal documents & Policies Needs analysis focus: what data do you need? See what promotions banks are offering.If the rate risesYour rate wont rise as you locked it in, so you can relax a little. in principle, around two weeks later compared with the The Reserve Bank reviews the OCR seven times each year, to make sure its at the right level. Like other central banks RBNZ is very likely to tighten the stance of monetary policy further. The Reserve Bank will make an announcement on the official cash rate today with many economists expecting it to jump up to 50 basis points to 3%. We noticed that you're using an ad blocker. We expect inflation will be much higher over the next five years than it has been over the past five years. And firms' pricing intentions, which have been the best inflation indicator of all, are stratospheric and at this point, still rising.". There is no sign of inflation coming down right now. by up to a week either side of review dates if a conflict OCR currently at 4.75% Next RBNZ OCR announcement: 05 April 2023 We asked our panel of experts to have their say on New Zealand's property market, the possible extension of the travel bubble, and more. review dates will be continuously published on the Reserve +64 (0)9 307 1629, RBNZ expected to show some leniency in next OCR announcement, The RBNZ is set to deliver the announcement on Wednesday, with a mid-tier raise. Core inflation is far too high. Previous guidance, outstanding inflation challenge. The RBNZ is set to deliver the announcement on Wednesday, with a mid-tier raise widely expected amongst analysts. If youve taken the time to make sure you are in the right fund or investment to meet your goals, you shouldnt need to change your strategy. Under this new rule: MPS - recent labour market data into its forecasts when the - OCR & MPS Media conference & live-stream 14 April - JGBs rally, BNZ chief economist Mike Jones thinks the RBNZ has made progress bringing the runaway economy back under control, Auckland University's Tim Hazledine offers a range of suggestions to help the Reserve Bank fight inflation, Global rates lower after their recent rise; Treasury yields down 5-7bps, German 10-year rate falls for first time in over two weeks. OCR announcement dates for 2023 After a period of much-needed respite over the holiday break, the RBNZ will be back to its regularly scheduled programming from late February. Please help us keep it that way by allowing your browser to display They may do too much. The Reserve Bank is expected to hike the official cash rate (OCR) on Wednesday as New Zealand experiences the highest level of inflation in decades. ASB expects more OCR increases over the year ahead; we think the OCR will rise from its new setting of 0.5%, to 1.5% by the end of 2022. Published date: 16 February 2023 Last modified date: 22 February 2023 Timeline of our OCR announcements since November 1999 See our chart of OCR announcements Official Cash Rate (OCR) (updated at end of month) Chart Summary Quarterly Monetary Policy Statements (in bold) are more in-depth - and may be where the RBNZ revises its forecasts. These investments are impacted by the changes in interest rates both here and offshore that have been occurring. The labour market is tight as a drum.". The Reserve Bank seems to be struggling to keep inflation under control, and a big hike like this, especially close to the holiday period, is not unexpected. The New Zealand dollar jumped more than half a US cent, breaking through US$0.70 within minutes of the announcement. Get two weeks free access to NBRs Premium Online Subscription, which includes full access to all of NBRs great content on any device. Buying your first home, next home, investing in property or just keen to review your mortgage? Starlink For Scott Base But No Phones During Dinner! Normally jumps to the OCR come in 0.25 basis point stages, though the central bank does make bigger moves pulling it down, such as a -1.50 basis point move during the height of the global . The low-risk options are weighted towards cash and income assets: things like government bonds and other fixed income investments. media would be given as much notice as possible. LVR tweaks substantive for owner-occupiers, Adviser returns from 15-year absence to much tougher finance market, Some good and bad news on the inflation war, Demand for mortgages continues to decline: RBNZ, Bank profits level out mortgage arrears rise, Passive managers piggy backing off active manager, Employers including KiwiSaver as part of pay packets instead of on top. Last year, the RBNZs response to the COVID-19 pandemic aimed to push interest rates within the economy significantly lower, including mortgage rates. The new OCR is an increase of 50 basis points from the previous OCR of 3%. Have a chat to one of our advisers. Normally jumps to the OCR come in 0.25 basis point stages, though the central bank does make bigger moves pulling it down, such as a -1.50 basis point move during the height of the global financial crisis and -0.75 basis points at the start of the COVID-19 pandemic. Welcome to the Reserve Bank of New Zealand - Te Ptea Matua. Some of the influences on mortgage rates are expected to continue to keep the shorter-term rates low for a few more months. National's finance spokesperson Nicola Willis said the government's . Last Article Uploaded: Monday, May 1st, 6:45PM. It's the eighth consecutive time the Reserve Bank opted for a rates rise, and sixth increase in 2022 alone - February, April, May, July and August saw similar action. MPS/OCR Bolton said he was seeing early signs of recession everywhere. The OCR has been steadily increasing since October last year in an ongoing bid to tackle inflation of 7.3%. Inflation remains elevated and beyond the target of RBNZ. These types of changes are always considered by investment managers. The current situation in New Zealand is no exception. The RBNZ will want to ensure they leave nothing on the table for their summer recess with the next OCR announcement not until February 22, 2023, Green said. Currently the OCR sits at 2.5% after the Reserve Bank's last announcement on July 13. But 2021 has been a turning point. Credit Suisse: Why New Zealand is safe from bank run contagion, RBNZ Survey: Almost all experts confident the OCR will rise to 4.75%, RBNZ Survey: 75% of experts expect the cash rate to peak between 4% and 4.5%, RBNZ Survey: 82% of experts believe inflation has hit its peak, RBNZ Survey: 73% of experts expect a recession before 2025, RBNZ Survey: Brace for rate rise as experts agree hike imminent, 8 for April: How to deal with NZs school holiday horror, On the brink: 3 million Kiwis experiencing financial stress, Finder Global Crypto Trading Platform Awards 2023, How to buy Credit Suisse Group (CS) shares, How to buy FLOKI Inu (FLOKI) in After a period of much-needed respite over the holiday break, the RBNZ will be back to its regularly scheduled programming from late February. We may also receive compensation if you click on certain links posted on our site. Compare other variable-rate mortgages to make sure youre still getting the best deal. There is probably still just a bit more work to do on tightening monetary policy. While we receive compensation when you click links to partners, they do not influence our content. BNZ agrees it's a "coin toss" but is leaning towards 25 basis points as well. Sign up to get all the latest articles direct to your inbox. Monetary Policy Reviews are more of an interim update, or check-in, between MPS announcements. See how your lender responds to the cut. StatsNZ revealed in January that inflation in the year to December 2021 had hit 5.9 percent, the highest annual increase since 1990. The low interest rates both here and abroad have been very positive for shares and property over recent years, including the past 12 months. We may also receive compensation if you click on certain links posted on our site. ASB is forecasting three rises to the official cash rate (OCR) this year, saying it's time for rates to start moving. Craig Pope (pictured above centre), the director of Craig Pope Financia, said he believed that the RBNZ was smart and would only increase the cash rate by 50bps at its meeting on November 23.