MNI BRIEF: RBNZ Holds OCR At 5.5%, Signals Higher For Longer

The Reserve Bank of New Zealand’s Monetary Policy Committee held the Official Cash Rate steady at 5.5% Wednesday for the third consecutive meeting, noting interest rates were constraining economic activity and reducing inflationary pressure “as required.”

The MPC’s decision was in line with market expectations, despite inflation well above the Reserve’s 1-3% target band. (See MNI RBNZ WATCH: MPC To Eye Further OCR Pause At 5.5%).

“Globally, headline inflation continues to fall but declines in core inflation are more gradual and uneven across economies,” the MPC meeting minutes showed. “In discussing recent central bank policy moves, the Committee noted that policy rates are now expected to remain at restrictive levels for a sustained period of time, in order to bring inflation back to respective central bank policy target levels.”

The MPC will next meet Nov 29.