RBNZ Governor Adrian Orr said on Wednesday that the official cash rate (OCR) will be above neutral by this time next year, according to Reuters. There is a heightened global inflation environment, he warned, explaining why the RBNZ has decided to step off the gas pedal. There is a clear path of rate hikes ahead of us, Orr added, with inflation at currently unacceptable levels. 

Market Reaction

Orr's remarks are in line with what he said in wake of the recent RBNZ policy meeting during Wednesday's Asia Pacific session and thus have not prompted a market reaction.