OCR preview: RBNZ tipped to leave rate at 2.25% and to reveal near-term forecasts on Wednesday

Tuesday, 7 April 2026

The Reserve Bank may release some fresh, near-term economic forecasts when it publishes its review of the Official Cash Rate on Wednesday.

Any extra information could enliven what is shaping up to be a dead-rubber review at which the central bank is not expected to shift the OCR from its current rate of 2.25% or provide much new messaging.

The bank currently issues four full-blown monetary policy statements each year, interspersed with three “reviews”, at which it often does tweak the OCR but without publishing detailed forward guidance.

The Reserve Bank is beefing up the reviews in a bid to increase transparency over its decision-making however, and will hold an online conference on Wednesday afternoon to discuss the outcome.

Read more:

• Reserve Bank should ‘avoid reacting too early’ to higher inflation, says governor

• Anna Breman says Kiwis can expect RBNZ to ‘stay true to the data’

• Nicola Willis and Barbara Edmond clash over inflation vs jobs focus for RBNZ

Spokesperson Scott Sinclair said that in addition to publishing the usual media release and summary record of its meeting, it would also be releasing some “briefing slides” that could include some near-term forecasts or key judgments.

But the bank won’t publicly update all its assumptions about where the OCR, inflation, economic growth and unemployment may travel over the next few years until May 27, the eve of the Budget, when it issues its next full monetary policy statement.

ANZ chief economist Sharon Zollner said she expected the Reserve Bank would leave the OCR unchanged on Wednesday and assumed its messaging would not differ much from that set out by Governor Anna Breman in a speech to BusinessNZ in Auckland on March 23.

Breman’s main message then was that the bank should avoid reacting too early to near-term inflation pressures stemming from the conflict in the Middle East that “monetary policy can do little about”.

Summarising Breman’s comments, Zollner said “no knee-jerk hikes, but ready to do what’s needed to ensure the medium-term inflation outlook remains on track”.

Markets were on Wednesday pricing in a 10% chance of a 25 basis point rise in the OCR, but Zollner said ANZ would put the likelihood of that at “zero”.

Finance Minister Nicola Willis made clear early last week that the economic forecasts she had been presented with by officials setting out the worst-case scenarios for the impact of the Middle East conflict had darkened.

There were “a range of scenarios”, some of which could see inflation rise above the then worst-case scenario she had sketched out earlier on in the conflict of inflation rising to 3.7%, she said.

But Willis continued to stress the unknowns.

“When will this conflict end and then, when it ends, what are the ongoing things that continue in the Middle East? Do we continue to see disruption in the Strait of Hormuz? Do we continue to see disruption in the Red Sea, for example, and what are the implications of that?

“Those are the sorts of questions that economists the world over are grappling with and there are no certain answers.”

ASB senior economist Jane Turner said the focus on Wednesday would be on the degree of concern members of the Reserve Bank’s monetary policy committee voiced about the inflation outlook following the “current oil price shock”.

The live-streamed media conference would provide a forum for more effective two-way communication, which was “a key positive in uncertain times”, she said.

“Current financial market pricing indicates more than an 80% chance of a 25-basis point hike in July, close to 40bp of hikes by September and around 70bp of hikes by year end.

“We expect a 25bp OCR hike in December and a 3.25% OCR ‘endpoint’ by late 2027,” but with a risk rate rises would come earlier and be more pronounced, she said.

Credit ratings agency S&P updated its economic forecasts for New Zealand last week but took a relatively phlegmatic view on the likely impact of the Middle East crisis.

It shaved half a percentage point off its forecast for economic growth this year, but said it still expected it to grow 1.6% and did not tip inflation rising above 3% at the year-end.

Analyst Antony Walker said its assumptions were based on the most intense phase of the Iran conflict easing “in the coming weeks” but with disruptions continuing for several months.

Its expectations included “Iran retaining the capacity to periodically deter shipping through the Strait of Hormuz and then also having selective attacks over the next couple of months”, he said.