RBNZ Decision Preview: 25bps Rate Hike All but Certain

On October 28 that according to Jinshi Data, multiple institutions have looked ahead to today's Reserve Bank of New Zealand interest rate decision, generally forecasting a 25-basis-point rate hike. New Zealand's current inflation level stands at 3.7%, above the 1% to 3% target range. Standard Chartered Bank stated that further rate hikes remain highly likely in the near term.

A Reuters poll revealed that 22 of 27 economists expect the Reserve Bank of New Zealand to raise rates by 25 basis points in October. The majority of the central bank's shadow committee members also recommend a 25-basis-point increase, though several members favor allowing more time for previous hikes to take full effect in the economy.

Divergence remains regarding the subsequent tightening path. TD Securities, ANZ, ASB Bank, and Westpac project that rates will climb to 3.50%, while the Bank of New Zealand expects a peak rate of 3.75%; in the Reuters survey, 13 respondents anticipate the Official Cash Rate will hold at 3.00% by year-end, and 9 foresee a rise to 3.25% in December.