The Monetary Policy Committee today agreed to hold the Official Cash Rate at 3.25 percent.

Annual consumers price inflation will likely increase towards the top of the Monetary Policy Committee’s 1 to 3 percent target band over mid-2025. However, with spare productive capacity in the economy and declining domestic inflation pressures, headline inflation is expected to remain in the band and return to around 2 percent by early 2026.

Elevated export prices and lower interest rates are supporting a recovery in the New Zealand economy. However, heightened global policy uncertainty and tariffs are expected to reduce global economic growth. This will likely slow the pace of New Zealand’s economic recovery, reducing inflation pressures.

The economic outlook remains highly uncertain. Further data on the speed of New Zealand’s economic recovery, the persistence of inflation, and the impacts of tariffs will influence the future path of the Official Cash Rate.

If medium-term inflation pressures continue to ease as projected, the Committee expects to lower the Official Cash Rate further.

Read the full statement and Record of meeting : https://www.rbnz.govt.nz/hub/news/2025/07/OCR-3-25-percent-OCR-unchanged

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