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To view our disclosure statements and other legal information, please visit our Legal Agreements page here. They will be Inflation is now back above 3%, and we expect it to press higher over late 2021/early 2022. The Reserve Bank today announced the 2021 dates for Only eight economists forecasted a sixth 50bp hike to 4% on November 23. The OCR is one of the key levers that the RBNZ can use to influence the economy. Based on ASB economists expectation that the OCR will peak 1.25% higher than the current levels (1.5%) in addition to assumptions about bank funding costs and inflation forecasts ASB economists expect mortgage interest rates to lift to levels around 1% to 3% higher than they are now by 2025. "Inflation is far too high. US Treasury yields fall post CPI but then reverses much of that price action, NZ's largest bank raises fixed and floating home loan rates, savings account rates, and term deposit rates in a broad response to the recent RBNZ OCR rises, Mortgage rates were unmoved by the RBNZs big hike as traders bet any increase now will be matched with a cut later, US Treasury yields push higher, ahead of key CPI data tonight. The expectations of what the Reserve Bank is going to do with the OCR influences New Zealands longer term interest rates. Copyright 1996-2023 KM Business Information NZ, ASB flooded with special home loan rate applications, ASB warned over responsible lending failures, Mortgage wars: ASB matches rivals with new home loan rates, Avanti Finance named best non-bank at the NZMAs, Kiwibank: Strong demand for labour remains, but will wane as the economy slows, FinPOWER appoints Australian general manager. If that continues to be the case, the higher expected returns of managed funds and other investments will continue to be more attractive to savers. 28 February 2022 Last modified date: 20 April 2023 Monetary Policy Statements and Financial Stability Reports Announcements and release dates We publish: all upcoming announcements relating to monetary policy decisions release dates for upcoming monetary policy statements and financial stability reports links to decisions and news releases. At best, it has plateaued around 7.2% which leaves a substantial gap to the current OCR. October. Flexibility option - Option to shift dates We expect inflation will be much higher over the next five years than it has been over the past five years. Just when we thought the 'shock' had gone out of Orr RBNZ lifts the OCR to 5.25% in surprise move to combat cyclone inflation. current guidelines. "The Reserve Bank is between something of a rock and a hard place," ANZ said in its report. The New Zealand dollar jumped more than half a US cent, breaking through US$0.70 within minutes of the announcement. In such an event, the markets and the Next OCR announcement OCR dates 2023 Past OCR rates Exchange rates and Trade Weighted Index (B1) Proposed changes to LVR Wholesale interest rates . If already paying more than the minimum payment on your home loan, drop payments to the minimum (if possible) if your budget is tight. website. Reserve Bank to make official cash rate announcement today Savers may be better off looking at challenger banks than the big banks, NZD/AUD recovers after strong Australian jobs report; NZD crosses recover, The Reserve Bank needs to show greater patience, NZD/AUD continues to drift lower and NZ/EUR falls to fresh two and a half year low, Backfire! implementation of the OCR will continue to be the working Copyright Squirrel Group Limited 2023. The current situation in New Zealand is no exception. These investments are impacted by the changes in interest rates both here and offshore that have been occurring. Both ASB and ANZ believe the OCR will begin to rise from August 2022. KiwiSaver and investment funds providers offer a range of choices to investors. Please don't interpret the order in which products appear on our Site as any endorsement or recommendation from us. ANZ's Business Outlook in March found inflation could be "moon-bound" given that nearly all surveyed businesses expected higher costs in the coming months, which flows on to increases in prices for consumers. The central bank also temporarily removed the loan-to-value ratio (LVR) restrictions impacting borrowers and borrowing costs. Like other central banks RBNZ is very likely to tighten the stance of monetary policy further. Compare accounts and ensure youre aware of whats on offer in the market. second Wednesday in April, July, and It is clear that the OCR needs to go up. Ask your lender for a rate discount so that if rates do rise you wont be worse off, or alternatively, compare other variable or even fixed-rate mortgages to find a better deal. The inflation outlook, while highly uncertain over the medium term, is worryingly high at present. The Official Cash Rate (OCR) affects the interest rates that people and businesses in New Zealand pay when they borrow money or earn on their savings. We may also receive compensation if you click on certain links posted on our site. OCR currently at 4.75% Next RBNZ OCR announcement: 05 April 2023 We asked our panel of experts to have their say on New Zealand's property market, the possible extension of the travel bubble, and more. How? If the economy overheats and inflation rises to an unacceptable level, the RBNZ may increase the cash rate to discourage excessive borrowing and tackle rising inflation. There was even talk of it going into the totally uncharted territory of a negative rate, as we have seen in Europe and Japan. To be sure, if the situation changes for the worse, then the RBNZ has options to maintain current settings for longer or even lower borrowing costs to support the economy. The latest quarterly inflation stats last month didn't exactly deliver the news the market (or anyone to be honest) was hoping for - with inflation tracking at 7.2%, as opposed to the 6.5% that was anticipated. OCR 26 May - OCR & MPS Media conference & in principle, around two weeks later compared with the And why did the Reserve Bank lift it today? Achilles House We are now starting to see people running into problems and I predict a massive cash flow crunch is coming., Read more: Hike it like it's hot: RBNZ expected to lift rates by historic 75 bps. Needs analysis focus: what data do you need? When it is adjusted, it is usually done in 0.25% increments, as we saw this month. NZ QSBO today; RBA meeting with consensus tilted towards a pause, market more convicted in that call than economists. The low interest rates both here and abroad have been very positive for shares and property over recent years, including the past 12 months. . Subscribe to our newsletter to ensure you're the first to get the latest articles and insights from the Squirrel team. Search for our upcoming events here. All content copyright NBR. There is no sign of inflation coming down right now. We endeavour to ensure that the information on this site is current and accurate but you should confirm any information with the product or service provider and read the information they can provide. As mentioned above, you still might want to monitor other deals in the market to keep informed.If the rate risesIf rates rise, savings accounts rates could increase as well. "In regards to the property market, the prospect of a stable official cash rate for at least the next year or so suggests no major upwards pressure on mortgage rates until the second half of 2022 although of course global financial market shifts can have a significant influence too, as well as upside inflation surprises within NZ. Westpac forecast suggests no OCR reductions until mid 2024 Statistics New Zealand says the cost of living for households rose 7.7% in the year to March 2023, boosted by higher rents and interest payments and increased grocery food, fruit and vegetables prices, New Reserve Bank mortgage figures show homeowners paid close to $4 billion in interest during the March quarter, while total scheduled repayments topped $6 billion for the first time since the RBNZ started publishing this data, Softer than expected German CPI, GDP and Euro area GDP data drive German Bunds down 14-15bps. OCR reaction: Rates set to rise from 2022 - DepositRates.co.nz Reserve Bank Governor Adrian Orr has lifted the official cash rate (OCR) by 50 basis points, to 4.75 per cent, despite billions of damage the economy faces after Cyclone Gabrielle. Check your spending, adjust your budget and expenses where possible. But this time, one key thing is very, very different inflation.". Find out more, TradeMe: Rents Soar For Small PropertiesTrade Me Property Sales Director Gavin Lloyd said the March 2023 figures show rents for apartments and small houses (1-2 bedroom) were soaring More>>, Seafood NZ: Welcomes Draft Industry Transformation PlanSeafood New Zealand Chief Executive Dr Jeremy Helson says the fishing industry shares the Governments vision of improving the environmental performance of commercial fisheries More>>, Reserve Bank: Proposes To Ease LVR RestrictionsThe Reserve Bank of New Zealand Te Ptea Matua is proposing to ease mortgage loan-to-value ratio (LVR) restrictions. Sign up to our free email newsletters here. How we release information - Reserve Bank of New Zealand Normally jumps to the OCR come in 0.25 basis point stages, though the central bank does make bigger moves pulling it down, such as a -1.50 basis point move during the height of the global financial crisis and -0.75 basis points at the start of the COVID-19 pandemic. We recommend seeking professional investment and/or mortgage advice before taking any action. "On the one hand, the path ahead for the economy is looking anything but smooth, with house prices falling and consumer confidence pummelled as household budgets are squeezed. It said commentators are on the fence over how big the jump will be but is opting for 25 basis points with the expectation the Reserve Bank will "deliver an upfront assessment reiterating that the tightening cycle is still in its early stages, that follow-up 50 basis point hikes (notably in May) are still possible and that the OCR will need to move above neutral levels to achieve the RBNZs objectives". "A further 25 point nudge in the cash rate, accompanied by a stern warning that a more aggressive interest rate track will likely be forthcoming, when it releases its May Monetary Policy Statement, might be a better approach.". Reserve Bank lifts official cash rate to 3.5% - 1news.co.nz In general, A move to 3% today would be a seven year high. Finder ROW Pty Ltd (ABN 38 624 431 750) provides factual information on and compares many, but not all, products and services. Kids are at school for just 8 days this month, but there are ways of coping, as Candice Harris from Auckland University of Technology explains. By the Nov-MPS, we expect the economy to be in recession, with the UR at 4.5% and CPI at 5.6%, and the risk of undershooting the inflation target as justification to start easing with a 50bps cut. finder.com compares a wide range of products, providers and services but we don't provide information on all available products, providers or services. Quarterly Monetary Policy Statements (in bold) are more in-depth - and may be where the RBNZ revises its forecasts. finder.com is an independent comparison platform and information service that aims to provide you with the tools you need to make better decisions. Infometrics economists mull quantitative easing in 2020. I believe the RBNZ will hike in February and April, and then pause. "For now, we are sticking to our call for a sequential path of 25bp hikes and a 2.75 percent early 2023 OCR peak. While compensation arrangements may affect the order, position or placement of product information, it doesn't influence our assessment of those products. While we are independent, we may receive compensation from our partners for featured placement of their products or services. Most of those choices fall on a risk spectrum, where customers can choose low risk and low returns, or higher returns with higher risk. When the RBNZ gets closer to actually changing the OCR setting, the upward pressure will come on the shorter terms and floating rates too.. Reserve Bank lifts Official Cash Rate 50 basis points to 5.25% saying severe weather events have led to higher prices for some goods & services, US JOLTS labour market report shows much weaker demand for labour - US Treasury yields down 6-12bps, equities weaker, USD weaker. However next year plays out, well be watching closely - with plenty of commentary over on the Squirrel blog to help make sense of what the Reserve Bank announcements mean for Kiwi homeowners and our housing market. We may receive compensation from our partners for placement of their products or services. credit card debit. And firms' pricing intentions, which have been the best inflation indicator of all, are stratospheric and at this point, still rising.". There is likely to be a further increase in the OCR, but it will be lower than the largest single hike (75 basis points) made last November. the Reserve Bank reserves the right to make changes to this OCR announcement - October 2021 | ASB Blog That may have a bigger impact on the housing market than what would be desirable, the bank said. Please help us keep it that way by allowing your browser to display But now theyve set us firmly on track for a recession, and with more and more Kiwi cutting back on their discretionary spending in order to survive higher rates, the sense across the market is that it wont need to get that far before the economy is brought under control. Official Cash Rate announcements 24 February ads. OCR tipped for record rise, recession still possible - economist This was also expected in financial markets; and furthermore, economists and analysts have already been talking that this is the start of a rising period for interest rates. Under this new rule: MPS - See our Investor Hub for market commentary and the latest investment insights. Expert analysis and predictions for the Reserve Bank of New Zealand's OCR decisions. Skip ahead to read the latest analysis, see how the OCR has changed over time and learn more about how the official cash rate affects you. The RBNZ has consistently lifted the cash rate by 0.50% in its five meetings in 2022, dating back to February. They said while New Zealand has had to tighten its purse strings, through increased interest rates, the domestic economy is in a good position to weather the global financial situation. credit card debit, $25 per user - Pay by monthly MPS/OCR review dates will shift to, The RBNZ is set to deliver the announcement on Wednesday, with a mid-tier raise widely expected amongst analysts. According to the Kiwibank team, 60% of NZ mortgages are either floating or up for re-fixing in the next 3-6 months, while 80% will refix in the next 6-12 months. review dates will be continuously published on the Reserve The release dates in full for the period until July 2022 are: Monetary Policy Reviews are more of an interim update, or check-in, between MPS announcements. Have a chat to one of our advisers. Advisers concerned ahead of central bank's big decision. After being hit by one bumper interest rate increase after another (after another) this year, well bet were not the only ones wondering what the Reserve Banks got in store for us in 2023. As a result, rates dropped to their lowest level on record, going back to the 1960s. which includes some flexibility to shift the date in case of If they dont pass on the full rate cut, ask for a rate discount, and if youre still not happy start comparing what other deals are in the market.If the rate holdsCompare other variable-rate mortgages to make sure youre still getting the best deal. Video [WATCH] Bolton changes views on DTIs, thinks LVRs need to be wound back, [WATCH] Bolton changes views on DTIs, thinks LVRs need to be wound back, Fishers's Marlin caught in US bank collapse, New and cheaper PI insurance hits the market, Lawyer petitions for probate tweak on KiwiSaver funds. The 2021 release dates are: Monetary Policy Statement / Official Cash Rate announcements 24 February - OCR & MPS Media conference & live-stream 14 April - OCR 26 May - OCR & MPS. 'Hard landing' predicted if RBNZ lifts cash rate by 0.75% | NZ Adviser Find an account which offers the same features and fees but with a better rate. If your fixed-rate mortgage is to end soon, start comparing what deals are on offer, so you dont find yourself scrambling to lock in another rate.If the rate gets cutIf you feel your mortgage is no longer competitive, you might want to obtain a quote from your lender to find out possible exit costs. The 2021 Currently the OCR sits at 2.5% after the Reserve Bank's last announcement on July 13. The OCR has been steadily increasing since October last year in an ongoing bid to tackle inflation of 7.3%. Discovery) - All Rights Reserved, By subscribing you agree to our Terms of Access and Privacy Policy, would be the largest increase to the OCR since May 2000, revealed in January that inflation in the year to December 2021, found inflation could be "moon-bound" giv. The dollar has fallen from US70.18c yesterday just before the announcement the Delta variant had arrived in NZ. day after the monetary policy announcement. See more of ASBs latest financial news and announcements here on our blog. John Bolton (pictured above left), founder of Squirrel Mortgages, said in his view a 75bps increase was too much. The RBNZ's assertive tightening to date is working, and the risk now is titled towards overtightening. The labour market is tight as a drum.". Squirrel Mortgages has a Shopper Approved rating of 4.7/5 based on 1762 ratings and reviews. For the last few months, longer term fixed mortgage rates have already been lifting in line with wholesale interest rates. The Reserve Bank has double-pumped the Official Cash Rate with its surprise 50 basis point hike in an effort to blindside the markets. See how your lender responds to the cut. "As in February, its likely to be a tough call between a 25bp and a 50bp hike. If those advocating for a CGT and other redistributive tax measures may be compared to a revolutionary band hiding out in the mountains, then Parkers reports are the equivalent of a bloody great ammunition dump! media would be given as much notice as possible. Market implementation of the OCR will continue to be the working day after the monetary policy announcement. Now that the October OCR increase is confirmed, and more increases are expected, it is likely to maintain the upwards pressure that have been on long term fixed mortgage rates all year, and could well lead to short term rate increases, including the variable mortgage rate. If they dont pass on the full rate cut, ask for a rate discount, and if youre still not happy start comparing what other deals are in the market. The Reserve Bank will make an announcement on the official cash rate today with many economists expecting it to jump up to 50 basis points to 3%. Last Article Uploaded: Monday, May 1st, 6:45PM. There is probably still just a bit more work to do on tightening monetary policy.