The Reserve Bank's Monetary Policy Committee will announce its OCR decision at Wednesday's July Monetary Policy Review, with bank economists divided on whether the cash rate will rise from its current 2.25%.
ANZ and BNZ are forecasting a 25 basis point increase to 2.5%. ANZ chief economist Sharon Zollner said the committee should "get a hike under the belt", saying it would be difficult for the RBNZ to signal fewer than two increases this year without seeing monetary conditions loosen substantially. BNZ head of research Stephen Toplis said the bank takes the view that the cash rate needs to move back towards neutral settings with some urgency to avoid having accommodative policy contribute to inflation pressures.
ASB and Westpac expect the OCR to hold at 2.25%. ASB had earlier anticipated a July increase but revised its call last week following recent US-Iran developments and expectations the MPC vote will again be divided, while Westpac chief economist Kelly Eckhold said despite three members supporting a hike in May, he believes the decision to hold may achieve consensus.
The OCR has sat at 2.25% since November 2025, when it was lowered from 2.5%. At the May review, the committee's external members supported a 25 basis point increase while internal members opposed it, with Governor Anna Breman's deciding vote keeping the rate at its current level.
Annual inflation was 3.1% in the March 2026 quarter, above the Reserve Bank's 1% to 3% target range. The central bank is projecting 4.2% inflation for the June quarter, with official CPI data due on 21 July 2026. At its May meeting, the MPC indicated it was comfortable with a minimum of three rate increases before the end of 2026.
Kiwibank economists Jarrod Kerr and Alexandra Turcu said oil prices reverting to pre-conflict levels had strengthened their view the OCR should remain at 2.25%, saying it would "give the economy breathing room". The bank forecasts inflation will drop to 1.9% by 2027.