Reserve Bank of New Zealand Delivers Further Rate Increase

Live updates

1. 1h ago

   Central Banks Diverge on Monetary Policy

   Central banks face diverging policy paths as global inflation pressures persist. The Reserve Bank of New Zealand previously raised its Official Cash Rate to 2.75%, while the European Central Bank prepares to deliver another interest-rate hike this week. Euro-zone inflation reached 3.3% in August, hitting its fastest pace in almost three years and exceeding the 2% target. Meanwhile, Federal Reserve officials weigh potential rate decisions amid stabilizing US inflation data and a hiring burst of 162,000 jobs reported in August.

   Why it matters

   Global monetary authorities are split on how to address rising price pressures and economic resilience. While the European Central Bank acts aggressively to combat climbing euro-area inflation, other central banks evaluate labor market growth and energy costs. These policy differences directly impact currency valuations and market risk appetite worldwide.

   What is confirmed

   • Euro-zone inflation jumped in August to 3.3%, marking the fastest pace in almost three years and exceeding the 2% target.
   • The European Central Bank is widely expected to deliver a quarter-point interest rate hike during the coming week.
   • The Reserve Bank of New Zealand previously raised its Official Cash Rate to 2.75%.

   Still unconfirmed

   • The European Central Bank is considering a potential third rate increase in December following this week's expected action.

   What to watch next

   • The European Central Bank policy announcement and subsequent rate decision.
   • Upcoming US consumer price data and its impact on Federal Reserve policy expectations.
   Sources used for this update (11)

   1. www.rttnews.com — Japanese Market Significantly Higher
   2. www.theglobeandmail.com — Hiring burst of 162,000 jobs in August puts the focus squarely back on inflation in the US
   3. news.ssbcrack.com — Australia Faces Renewed Inflationary Pressures, RBA Predicts Further Rate Hikes
   4. www.briefs.co — ECB Set to Hike Again This Week, With December Now Back in Play
   5. www.europesays.com — ECB doubles down as G7’s hawk with another rate hike due in coming week
   6. www.afr.com — ASX on edge as oil war rattles markets
   7. www.europesays.com — Risk appetite in global markets rise as geopolitical tensions somewhat ease
   8. jen.jiji.com — Kazakh president awards writer Valery Mikhailov Order of Barys
   9. jen.jiji.com — Kazakhstan expands exploration plans with up to 200 new wells
   10. www.europesays.com — ECB doubles down as G7’s hawk with second rate hike likely this week | World News
   11. www.thestar.com — Asian shares are mixed as chipmaker shares rally in Tokyo and Seoul
   confidence 90%
2. 2d ago

   NZ Dollar Gains as Fed Official Signals Rate Pause

   The New Zealand Dollar rose to approximately 0.5895 against the US Dollar during Friday Asian trading. This recovery follows a previous decline after the Reserve Bank of New Zealand raised the Official Cash Rate to 2.75%. The Kiwi's current strength stems from a softer US Dollar, triggered by Federal Reserve Governor Christopher Waller's indication that he favors keeping US interest rates unchanged at the September meeting, provided inflation data remains stable. Traders are now adjusting expectations for US policy ahead of the August employment report.

   Why it matters

   The Reserve Bank of New Zealand recently implemented two consecutive rate hikes to combat inflation. These moves pushed the Official Cash Rate to 2.75% and led major domestic banks to increase floating mortgage rates. Current currency fluctuations reflect the interplay between New Zealand's tightening cycle and the US Federal Reserve's potential pause.

   What is confirmed

   • The NZD/USD exchange rate reached around 0.5895 during Asian trading on Friday.
   • Federal Reserve Governor Christopher Waller indicated he favors leaving interest rates unchanged at the September meeting if inflation figures do not deliver negative surprises.

   What to watch next

   • Release of the US August employment report
   • Upcoming US inflation figures
   Sources used for this update (8)

   1. www.thetimes.com.au — US strikes Iran at Hormuz as new mine threat puts global oil route back in danger
   2. economictimes.indiatimes.com — Sensex Today | Nifty 50 | Stock Market Live Updates: Sensex gains over 50 pts, Nifty above 23,900; Adani Ports, Power Grid rise up to 2%
   3. www.newstalkzb.co.nz — MIKE HOSKING BREAKFAST
   4. awaaz.co.nz — Beyond Bollywood: Why New Zealand musicians should be looking to India
   5. www.tradingpedia.com — Kiwi Edges Higher as Traders Weigh Fed and RBNZ Signals
   6. economictimes.indiatimes.com — CURRENCY CONVERTER
   7. convera.com — USD/JPY falls to one-month low as BoJ reinforce hawkish stance
   8. www.joburgetc.com — Stocks rally and oil edges up as Fed comments ease September hike fears
   confidence 90%
3. 4d ago

   Reserve Bank of New Zealand Raises Official Cash Rate to 2.75%

   The Reserve Bank of New Zealand increased the Official Cash Rate by 25 basis points to 2.75% from 2.50% following its August monetary policy meeting. This marks the second consecutive rate hike as the central bank seeks to curb inflation and shift toward less stimulatory settings. The decision aligned with market expectations. In response, all five major New Zealand banks raised their floating mortgage rates by 25 basis points. The New Zealand Dollar fell against the U.S. Dollar following the announcement.

   Why it matters

   The RBNZ aims to return inflation to a 2% midpoint target while maintaining support for employment and economic growth. The bank is pursuing a gradual withdrawal of monetary stimulus to achieve this balance. This tightening cycle occurs as the bank signals that further rate increases may be necessary.

   What is confirmed

   • The Reserve Bank of New Zealand raised the Official Cash Rate by 25 basis points to 2.75% from 2.50%.
   • This is the second straight meeting where the RBNZ has increased interest rates.
   • Five major New Zealand banks increased their floating mortgage rates by 25 basis points.
   • The RBNZ target midpoint for inflation is 2%.

   Still unconfirmed

   • There is a possibility of a Halloween rate hike occurring just before the election.
   • The Monetary Policy Committee is governed by Anna Breman.

   What to watch next

   • U.S. labor market data for August due Friday
   Sources used for this update (10)

   1. Bloomberg.com — RBNZ Delivers Back-to-Back Rate Hikes to Curb Inflation
   2. WSJ — Reserve Bank of New Zealand Delivers Further Rate Increase
   3. thepost.co.nz — Chance of a ‘Halloween Hike’ just before election lower, but not gone
   4. RNZ — RBNZ set to deliver another rate rise - with more to come
   5. equiti.com — RBNZ Interest Rate Outlook: Is New Zealand Entering a Harder Phase of the Rate Cycle?
   6. www.thestar.com.my — RBNZ delivers back-to-back rate hikes to curb inflation
   7. www.1news.co.nz — All major banks hike floating mortgage rates
   8. finance.biggo.com — Yen Surges Past 159 as BOJ Hawkish Signals Spark Rate-Check Speculation
   9. www.tradingpedia.com — NZD Drops as RBNZ Hikes Rates, Eyes Turn to US Jobs Data
   10. www.rttnews.com — New Zealand Hikes Interest Rate For Second Straight Time
   confidence 95%