RBNZ Governor Breman: If economy evolves as expected, current 2.5% rate likely remains

New Zealand's Economic Outlook

Reserve Bank of New Zealand Governor Breman stated that the economic outlook has evolved in line with the Monetary Policy Committee's expectations, with signs of growth recovery continuing to emerge. This is likely to heighten expectations among investors for policy stability from the RBNZ.

Stability of Current Rates

Breman emphasized that, based on short-term interest rate forecasts stemming from the November Monetary Policy Statement, the current Official Cash Rate (OCR) of 2.25% is expected to remain unchanged, with a low probability of any further cuts, contingent on the economy evolving as expected.

Financial Market Conditions

Additionally, Breman noted that financial market conditions have tightened more than anticipated since the November policy decision, and this needs to be factored into ongoing assessments of growth and inflation outlook. Such shifts in the financial environment are likely to play a key role in future policy decisions.