The Reserve Bank of New Zealand (RBNZ) has decided to leave its official cash rate (OCR) unchanged at 5.50% in Jul for an eighth straight meeting. The RBNZ’s tone was a lot less hawkish than in May, UOB Group economist Lee Sue Ann notes.

RBNZ leaves its official cash rate unchanged

“RBNZ has decided to leave its official cash rate (OCR) unchanged at 5.50% in Jul for an eighth straight meeting. The decision made on Wednesday, 10 Jul, was an interim review, and hence there was no Monetary Policy Statement, updated economic forecasts nor press conference by RBNZ Governor Adrian Orr.”

“The RBNZ’s tone was a lot less hawkish than in May, when policymakers discussed the case to raise rates further while signaling that a rate cut was unlikely before 3Q25. Instead, there was no mention of a rate hike, and the RBNZ highlighted that ‘restrictive monetary policy has significantly reduced consumer price inflation’.”

“We are currently maintaining our view for the first rate cut to occur in 4Q24, as recent economic data shows the service and manufacturing sectors softening and business confidence falling. All eyes will now turn to 2Q24 CPI data on 17 Jul, while the next monetary policy meeting will be on 14 Aug.”