Official foreign exchange rate data from financial markets

RBNZ Cuts OCR to 4.25% for 3rd Time, NZD/USD Surges

Nov 27, 2024, 01:03 AM

The Reserve Bank of New Zealand (RBNZ) has cut its official cash rate (OCR) by 50 basis points to 4.25%, marking the third consecutive rate cut. This aligns with economists' expectations and signals a continuation of monetary policy easing. The RBNZ projects inflation to remain close to the midpoint of the 1-3% target range, with expectations of further rate reductions in early next year if economic conditions evolve as projected. Governor Adrian Orr expressed confidence in the easing of domestic inflation pressures and indicated that the OCR could reach a neutral level, estimated between 2.5% to 3.5%, by the end of 2025. The RBNZ also anticipates a recession in Q2-Q3 2024, followed by economic recovery in 2025. The bank projects the OCR to be at 4.07% in the first quarter of 2025, with a potential further cut in February 2025 depending on economic activity. Following the rate cut, the New Zealand dollar (NZD) surged against the US dollar (USD).