The Reserve Bank of New Zealand (RBNZ) decided to hold the Official Cash Rate (OCR) steady at 2.25% after concluding the April monetary policy meeting on Wednesday.
The decision aligned with the market expectations.
Summary of the RBNZ Monetary Policy Review (MPR)
Summary of the RBNZ Monetary Policy Review (MPR)
The monetary policy committee today agreed to hold the OCR at 2.25 percent.
Events in the Middle East have materially altered the outlook and the balance of risks for inflation.
In the near term, inflation is expected to increase and the economic recovery to weaken.
The monetary policy committee is focused on ensuring that inflation returns to the 2-percent target midpoint over the medium term.
The committee is vigilant to any generalised inflationary pressure and stands ready to act to return inflation.
This requires core inflation and wage growth to remain contained and medium- and long-term inflation expectations to remain around 2 percent.
If these conditions are not met, decisive and timely increases in the OCR would be required.
The extent of the near-term increase in headline inflation will depend on how the conflict in the Middle East evolves and the magnitude and duration of the disruption to global supply chains and energy markets.
The current economic situation is different to 2022 when covid-19 and Russia’s invasion of Ukraine disrupted global supply chains and increased energy prices. Back then, demand was growing strongly, adding to inflation pressure.
The committee’s decision to hold the OCR balances the potential benefits of responding pre-emptively to the risk of higher medium-term inflation against the cost of unnecessarily stifling the economic recovery.
Minutes of the RBNZ interest rate meeting
Conflict in the Middle East is leading to significant supply side disruptions
On Wednesday, 8 April, the committee reached consensus to hold the OCR at 2.25 percent.
Supply chain disruptions will lead to higher near-term inflation in New Zealand.
Economic growth is expected to be weaker in the near term.
NZD/USD reaction to the RBNZ interest rate decision
The New Zealand Dollar attracts some buyers in an immediate reaction to the RBNZ interest rate decision. The NZD/USD pair currently trades at 0.5808, up 1.33% on the day.
New Zealand Dollar Price Today
The table below shows the percentage change of New Zealand Dollar (NZD) against listed major currencies today. New Zealand Dollar was the strongest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.72% | -0.86% | -0.81% | -0.32% | -1.28% | -1.28% | -0.96% | |
| EUR | 0.72% | -0.15% | -0.09% | 0.39% | -0.55% | -0.58% | -0.26% | |
| GBP | 0.86% | 0.15% | 0.04% | 0.54% | -0.38% | -0.41% | -0.11% | |
| JPY | 0.81% | 0.09% | -0.04% | 0.47% | -0.45% | -0.46% | -0.15% | |
| CAD | 0.32% | -0.39% | -0.54% | -0.47% | -0.92% | -0.93% | -0.63% | |
| AUD | 1.28% | 0.55% | 0.38% | 0.45% | 0.92% | -0.02% | 0.29% | |
| NZD | 1.28% | 0.58% | 0.41% | 0.46% | 0.93% | 0.02% | 0.31% | |
| CHF | 0.96% | 0.26% | 0.11% | 0.15% | 0.63% | -0.29% | -0.31% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the New Zealand Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent NZD (base)/USD (quote).
This section below was published on April 7 at 20:15 GMT as a preview of the Reserve Bank of New Zealand (RBNZ) interest rate decision.
- The Reserve Bank of New Zealand is set to hold the key interest rate at 2.25% for a second straight meeting on Wednesday.
- The RBNZ’s Monetary Policy Review and Governor Breman’s words will be closely scrutinized for policy guidance.
- The New Zealand Dollar is expected to rock in reaction to the RBNZ policy announcements.
The Reserve Bank of New Zealand (RBNZ) is set to extend the pause on its current interest rate-cutting cycle for the second consecutive meeting on Wednesday, leaving the Official Cash Rate (OCR) unadjusted at 2.25%, as the Iran war adds uncertainty to the economic and inflation outlook.
The decision is widely expected and will be announced at 02:00 GMT, accompanied by the Monetary Policy Review (MPR) and the Minutes of the meeting. RBNZ Governor Dr. Anna Breman will hold the post-monetary policy meeting press conference at 03:00 GMT.
The New Zealand Dollar (NZD) could experience intense volatility on either a probable hawkish pivot from the RBNZ or its wait-and-see stance.
What to expect from the RBNZ interest rate decision?
With a rate on-hold decision fully baked in, markets will dissect the RBNZ MPR and Governor Breman’s commentary for any hints on a likely rate hike this year in the wake of the energy shock-driven higher inflation projections.
During the press conference, Breman is expected to stick to the script delivered in her recent speech on March 23.
Back then, Breman said that the Bank is “looking for second-round effects” and “if inflation expectations shift, (it) will act. “
“[We] do not want to react too soon to inflationary pressures,” she added, safeguarding against premature tightening of financial conditions.
New Zealand’s annual inflation rate stood at 3.1% in the quarter ending December 2025, slightly above the RBNZ’s target range of 1% to 3%.
The Minutes of the meeting will also hold some relevance as these could provide insights about a probable debate among policymakers over the likelihood of second-round persistent inflation, potentially offering policy guidance.
“Like the Governor’s speech last week, the Bank’s communication is likely to reaffirm the Bank’s reluctance to respond impulsively to the supply shock, especially when the economy is operating below capacity, Analysts at TD Securities (TDS) said. “This should challenge the market’s pricing of more than 75bps of hikes this year.”
How will the RBNZ interest rate decision impact the New Zealand Dollar?
The NZD/USD pair hovers near the five-month lows of 0.5681 in the lead-up to the RBNZ showdown. Will the RBNZ’s hawkish pivot rescue the Kiwi bulls?
If the RBNZ surprises with hints on a potential shift toward interest-rate hikes later this year, the NZD could embark upon a sustained recovery against the US Dollar (USD).
On the contrary, if the central bank dismisses concerns over the near-term inflation shock and sticks to a wait-and-see stance, the Kiwi Dollar could resume its bearish trend.
Dhwani Mehta, Asian Session Lead Analyst at FXStreet, offers a brief technical outlook for NZD/USD and explains:
“The Kiwi remains vulnerable, despite the dead cat bounce. The 14-day Relative Strength Index (RSI) holds well below the midline, while a Bear Cross is playing out. The 21-day Simple Moving Average (SMA) closed below the 100-day SMA on April 1, confirming the bearish bias.”
“The immediate resistance is seen at the 0.5750 psychological level on the road to recovery. The next topside hurdles align at the 0.5800 round figure and the 100-day SMA at 0.5840. On the flip side, strong support is seen at the 0.5600 threshold, below which the November 2025 low of 0.5580 will be at risk. The line in the sand for NZD bulls is at the 0.5550 mark,” Dhwani adds.
New Zealand Dollar FAQs
The New Zealand Dollar (NZD), also known as the Kiwi, is a well-known traded currency among investors. Its value is broadly determined by the health of the New Zealand economy and the country’s central bank policy. Still, there are some unique particularities that also can make NZD move. The performance of the Chinese economy tends to move the Kiwi because China is New Zealand’s biggest trading partner. Bad news for the Chinese economy likely means less New Zealand exports to the country, hitting the economy and thus its currency. Another factor moving NZD is dairy prices as the dairy industry is New Zealand’s main export. High dairy prices boost export income, contributing positively to the economy and thus to the NZD.
The Reserve Bank of New Zealand (RBNZ) aims to achieve and maintain an inflation rate between 1% and 3% over the medium term, with a focus to keep it near the 2% mid-point. To this end, the bank sets an appropriate level of interest rates. When inflation is too high, the RBNZ will increase interest rates to cool the economy, but the move will also make bond yields higher, increasing investors’ appeal to invest in the country and thus boosting NZD. On the contrary, lower interest rates tend to weaken NZD. The so-called rate differential, or how rates in New Zealand are or are expected to be compared to the ones set by the US Federal Reserve, can also play a key role in moving the NZD/USD pair.
Macroeconomic data releases in New Zealand are key to assess the state of the economy and can impact the New Zealand Dollar’s (NZD) valuation. A strong economy, based on high economic growth, low unemployment and high confidence is good for NZD. High economic growth attracts foreign investment and may encourage the Reserve Bank of New Zealand to increase interest rates, if this economic strength comes together with elevated inflation. Conversely, if economic data is weak, NZD is likely to depreciate.
The New Zealand Dollar (NZD) tends to strengthen during risk-on periods, or when investors perceive that broader market risks are low and are optimistic about growth. This tends to lead to a more favorable outlook for commodities and so-called ‘commodity currencies’ such as the Kiwi. Conversely, NZD tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens.
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