RBNZ pauses interest rates at 5.5%

The Reserve Bank of New Zealand (RNBZ) kept interest rates unchanged at 5.5 percent on Wednesday, with forecasts of some cuts in 2024.

“The Committee agreed that the OCR will need to remain at a restrictive level for the foreseeable future,” said the RBNZ in a statement.

The RNBZ has been combating inflation by increasing rates by 525 basis points over 20 months, the most aggressive tightening policy since 1999.

New Zealand’s annual inflation has been declining to 6.7 percent, and the monetary policy committee has targeted inflation rates to decline by three percent by the second half of 2024.

“Consumer spending growth has eased and residential construction activity has declined, while house prices have returned to more sustainable levels,” the RBNZ stated.