Reserve Bank of New Zealand raises Official Cash Rate to 2.75%

The Reserve Bank of New Zealand (RBNZ) has increased the Official Cash Rate (OCR) from 2.5% to 2.75%. This move aims to return inflation to the target band through a gradual removal of monetary stimulus while attempting to avoid a deep economic downturn.

Despite the hike, RBNZ Assistant Governor Karen Silk noted a lack of parity in how interest rate changes are being passed to consumers. While floating mortgage rates have seen significant increases, deposit rates have seen much smaller adjustments. Silk attributed this to “depositor inertia” and high bank liquidity, suggesting that savers should “shop around” to find better rates rather than leaving funds in low-earning transactional accounts.

In the broader economy, New Zealand’s exports in meat and dairy remain strong due to global demand, though this has been offset by a 9% drop in the terms of trade caused by high fuel import prices. Meanwhile, the construction industry has shown its first signs of growth in the June 2026 quarter after nine consecutive quarters of decline.