Reserve Bank of New Zealand Analysis

The RBNZ watch tool — Official Cash Rate context and market-implied outlook for every Monetary Policy Statement and Monetary Policy Review

Reserve Bank of New Zealand Analysis's next policy meeting is scheduled for 28 October 2026. The current market-implied probability of no change is 97%.

RBNZ Overview Reserve Bank of New Zealand Overview

What is the Reserve Bank of New Zealand?

The Reserve Bank of New Zealand (RBNZ), known in Māori as Te Pūtea Matua, is New Zealand's central bank. Its Monetary Policy Committee sets the Official Cash Rate (OCR) — New Zealand's main policy interest rate — to keep inflation low and stable. New Zealand was the first country in the world to adopt an explicit inflation target, back in 1990, and other central banks later copied the approach.

Key Facts:

  • Policy rate: the Official Cash Rate (OCR), set by the Monetary Policy Committee (MPC)
  • Meets on a scheduled cycle of seven OCR decisions a year, four of them full Monetary Policy Statements
  • Legal mandate: keep consumer price inflation between 1% and 3% on average over the medium term, focused on the 2% midpoint
  • Currency: the New Zealand dollar (NZD)

The Reserve Bank of New Zealand conducts monetary policy under the Reserve Bank of New Zealand Act 2021, through a Monetary Policy Committee (MPC) of five to seven members — a majority of Reserve Bank staff (including the Governor, who chairs the committee) alongside external members — operating under a Remit and Charter set by the Minister of Finance. The current Remit, in force since 20 December 2023 following the Reserve Bank of New Zealand (Economic Objective) Amendment Act 2023, narrows the MPC's primary objective to price stability: keeping CPI inflation between 1% and 3% on average over the medium term, with a focus on the 2% midpoint. Maximising sustainable employment was removed as a standalone objective in that 2023 amendment; the Remit now asks the MPC to "avoid unnecessary instability in output, employment, interest rates and the exchange rate" as a secondary consideration while pursuing the inflation objective, rather than pursue full employment in its own right.

Operational Framework:
• Policy Rate: the Official Cash Rate (OCR), the RBNZ's single policy instrument under normal conditions
• Decision-maker: the Monetary Policy Committee, chaired by the Governor
• Mandate: price stability (CPI inflation 1–3%, 2% focus) under the Remit effective 20 December 2023
• Meeting Frequency: seven scheduled OCR decisions a year — four Monetary Policy Statements (MPS) with full projections, three interim Monetary Policy Reviews (MPR)
• Transmission: OCR moves pass through to bank bill and swap rates and, with a lag, to New Zealand's largely floating- and short-fixed-rate mortgage book
2.75%
Official Cash Rate (OCR)
Live figure from the same data pipeline used across this site
1–3%
Inflation Target Band
Focused on the 2% midpoint — Remit effective 20 Dec 2023
October 28, 2026
Next Policy Decision
Monetary Policy Statement or Monetary Policy Review
N/A
Policy Stance vs. Model-Implied Neutral
See Methodology below for how this is calculated
RBNZ Methodology & Data Sources
Market-Implied Rate Expectations
Why probability calculations for the RBNZ are different
New Zealand has no futures market that tracks the Official Cash Rate directly. The closest liquid contract settles on the 90-day bank bill rate, which sits a little above the OCR — so these odds are a guide to direction, not a precise readout. ASX 90-Day NZ Bank Bill futures settle on BKBM, a term rate carrying a bank credit spread over the OCR. Per-meeting odds are recovered with a step-function bootstrap over the quarterly strip, then read under a constant-spread assumption.
See methodology

What Will the RBNZ Do Next? RBNZ OCR Decisions — Probability Summary

Market-implied probabilities for each upcoming RBNZ Official Cash Rate decision (Monetary Policy Statement or Monetary Policy Review), derived from ASX 90-Day New Zealand Bank Bill futures. Because only quarterly bank bill contracts trade while the RBNZ holds roughly two decisions per quarter, per-meeting probabilities are recovered with a step-function bootstrap — see how this is calculated.

These probabilities are cumulative relative to today, not independent bets placed fresh at each meeting: a given decision's hike probability is the chance the OCR is higher than today's level by that date, and it already includes any move priced in for earlier decisions. They should not be added, multiplied, or compared across meetings as if each one stood alone.

Current RBNZ Official Cash Rate
2.75%
RBNZ probabilities are derived from ASX 90-Day New Zealand Bank Bill futures, which settle on BKBM — a 3-month bank-bill rate carrying a bank credit spread over the Official Cash Rate, not the OCR itself. Every figure assumes the current BKBM–OCR spread of +31 bp (BKBM 3.06% − OCR 2.75%) stays constant over the whole forecast horizon. That spread is not stable: it typically runs 15–30 bp in normal conditions, widens to 40–80 bp when markets price a tightening cycle, compresses toward zero or negative when cuts are expected, and blows out past 100 bp in banking stress. Because the spread widens exactly when the market prices hikes, holding it constant pushes the bank-bill-implied rate higher than the true expected OCR path — so these probabilities overstate the odds of hikes during a tightening cycle (and understate cuts during an easing one). Read them as directional, not precise. These figures are derived from ASX 90-Day New Zealand Bank Bill futures, which settle on BKBM — a 3-month bank-bill rate carrying a bank credit spread over the Official Cash Rate, not the OCR itself. Every figure assumes the current BKBM–OCR spread stays constant over the whole forecast horizon. That spread is not stable: it typically runs 15–30 bp in normal conditions, widens to 40–80 bp when markets price a tightening cycle, compresses toward zero or negative when cuts are expected, and blows out past 100 bp in banking stress. Because the spread widens exactly when the market prices hikes, holding it constant pushes the bank-bill-implied rate above the true expected OCR path — so these probabilities overstate the odds of hikes during a tightening cycle and understate cuts during an easing one. Read them as directional, not precise.

Latest observed 90-day BKBM: 3.06%  ·  BKBM − OCR spread applied: +31 bp

Markets price 52 bp of tightening in total — about 2.1 hikes — across the next 3 meetings.
This is the one figure that is safe to quote on its own. The per-meeting percentages below describe the same single expected path seen from different dates — they are not separate bets, and adding them across meetings double-counts the same move.
Meeting
Move at this meetingThe fresh move priced for this date alone
Rate level by this dateCumulative — already includes every move priced for earlier meetings
October 28, 2026
3.5%-0.9 bp
2.74%higher 0.0%same 96.5%lower 3.5%
December 9, 2026
78.6%+19.6 bp
2.94%higher 75.8%same 23.4%lower 0.7%
February 17, 2027
100.0%+33.2 bp
3.27%higher 99.5%same 0.5%lower 0.0%

Where the market thinks the rate will be

Each column is one meeting; each row is a policy rate level. Darker means the market puts more weight on that level being in force after that meeting. The outlined row is today’s rate. Read down a column for one meeting’s full distribution — each column sums to 100%.

Rate
Oct 26
Dec 26
Feb 27
3.50%
25
3.25%
59
3.00%
76
16
2.75%
97
23
1
2.50%
3
1

Shading: share of probability on that rate level. Blank cells carry under 0.5%.

MeetingMove at this meetingRate level by this date (cumulative — includes moves priced for earlier meetings)
Expectedhighersamelower
October 28, 2026
3.5%-0.9 bp
2.74%0.0%96.5%3.5%
December 9, 2026
78.6%+19.6 bp
2.94%75.8%23.4%0.7%
February 17, 2027
100.0%+33.2 bp
3.27%99.5%0.5%0.0%
Markets price 52 bp of tightening in total — about 2.1 hikes — across the next 3 meetings.
This is the one figure that is safe to quote on its own. The per-meeting percentages below describe the same single expected path seen from different dates — they are not separate bets, and adding them across meetings double-counts the same move.

Where the market thinks the rate will be

Each column is one meeting; each row is a policy rate level. Darker means the market puts more weight on that level being in force after that meeting. The outlined row is today’s rate. Read down a column for one meeting’s full distribution — each column sums to 100%.

Rate
Oct 26
Dec 26
Feb 27
3.50%
25
3.25%
59
3.00%
76
16
2.75%
97
23
1
2.50%
3
1

Shading: share of probability on that rate level. Blank cells carry under 0.5%.

Probabilities are derived from ASX 90-Day NZ Bank Bill futures. When the futures data is unavailable, out of date, or cannot be cleanly attributed to a single decision, no figure is shown rather than an estimate. Figures are cumulative from today — a later decision's probability already includes moves priced in for earlier ones.

Granular Rate Change Probabilities by Decision

Bars show the probability of each OCR outcome (in basis points) at the selected decision. How this is calculated

Market Implied OCR Path

Based on ASX 90-Day NZ Bank Bill futures, shifted by the current BKBM–OCR spread. Shows where markets expect the OCR to sit at each future date, comparing today's expectations with those from 1 and 4 weeks ago.

Data as of September 4, 2026

How We Calculate RBNZ Probabilities

Why New Zealand Is a Harder Case

For the US Federal Reserve and the European Central Bank, traders use futures contracts that each cover a single month, and those central banks meet about once a month — so every contract lines up neatly with one meeting.

New Zealand is different in two ways:

  • Only 3-month contracts exist. The most liquid NZ short-rate contract — ASX 90-Day Bank Bill futures — covers a whole three-month block, not a single month.
  • The RBNZ meets ~7 times a year. That is roughly two decisions in most three-month blocks, so one contract's price blends the market's expectations for two decisions together.

There is also a third wrinkle unique to New Zealand: the contract does not track the OCR itself. It tracks the 90-day bank bill rate, which trades a little above the OCR because it carries a bank-lending premium.

The puzzle — and how we solve it
  • Timing leaves a fingerprint. A contract's price is an average over the quarter. A rate change early in the quarter pulls that average more than one late in the quarter — so comparing one quarter's average with the next reveals roughly when a change happened.
  • The RBNZ moves rarely. It almost never changes the OCR at two decisions within the same three months. So when the data is ambiguous, we assume the move happens at as few decisions as possible.
  • The bank-bill premium is measured, not guessed. We take the latest observed gap between the 90-day bank bill rate and the OCR and subtract it, so the numbers are expressed as OCR moves. We hold that gap constant going forward — which is a real simplification, spelled out in the limitation box above.
⚠️ When we show nothing. If the futures data is missing, out of date, or cannot be split cleanly between two decisions, we display no probability rather than a guess. Honest gaps beat invented numbers.

Step-Function Bootstrap from the Quarterly Bank Bill Strip

Instrument. ASX 90-Day New Zealand Bank Bill futures settle on the IMM quarterly cycle (March, June, September, December) against BKBM, the NZ Financial Markets Association's 90-day bank bill benchmark. Each contract prices 100 − the average BKBM over its roughly three-month reference window.

The identification problem. The monthly PyFedWatch/CME method used for the Fed, ECB and BoE assigns one meeting per contract window. The RBNZ holds about seven OCR decisions a year — roughly two inside each quarterly window — so one contract is one equation in two unknown decision steps, under-determined by about a factor of two. This is the same problem the Bank of Japan page describes for TONA, and we solve it the same way.

Model. The overnight path is treated as piecewise-constant, changing only on decision dates. The level after decision k is Rk = R0 + Σj≤k δj, where each δj is the step at decision j. Each contract contributes one linear equation whose coefficients are the day-weighted fraction of that contract's window falling after each decision — so a step early in a window loads that window's average, while a step late in the window barely moves it but shows up in full in the next window. The short-and-wide system is resolved with a sparsity (ℓ1) prior via iteratively reweighted least squares, which localises each move to a single decision rather than smearing a half-move across two. The recovered steps are quantised to 25bp and fed into the same expanding-tree methodology used for the Fed and ECB, so the decision tabs, granular basis-point outcomes and aggregated cut/hold/hike figures are produced by identical downstream code.

The BKBM anchor and the constant-spread assumption

Unlike TONA (BoJ) or SARON (SNB), which sit within a few basis points of their policy rates, BKBM is a genuine bank credit rate. We anchor R0 on the latest observed 90-day BKBM and carry the current BKBM − OCR spread forward unchanged, exactly as the €STR/SONIA calculations do for the ECB and BoE. The RBNZ's own published research flags bank bill futures as a noisier proxy for OCR expectations than overnight-indexed-swap (OIS) pricing, which this site does not currently license. The spread is persisted as an explicit, auditable number for every run. Its known failure mode: it widens in a tightening cycle and in credit stress — precisely when the probabilities matter most — so a constant spread biases the implied path toward hikes in exactly those episodes.

Honesty guards (no invented data)
  • A stale strip, fewer contracts than the decision horizon, or a degenerate fit (large residual) each yield no per-decision probabilities rather than a forced decomposition.
  • Decisions beyond the coverage of the available contracts receive no figure.
  • The BKBM anchor and the OCR shown above come from live data; if neither can be sourced, no probabilities are published.

Contrast with the ECB. The €STR calculation reads one meeting per monthly contract directly. The RBNZ calculation adds two stages in front — the quarterly-strip bootstrap that recovers each decision's step, and the BKBM→OCR spread adjustment — and is otherwise identical.

Latest RBNZ News RBNZ News & Market Analysis

No preloaded news found.

When Does the RBNZ Meet? RBNZ Meeting Schedule

The Monetary Policy Committee makes seven scheduled OCR decisions a year. Four of them are Monetary Policy Statements — the "big" decisions, with a full new set of economic forecasts and a press conference. The other three are Monetary Policy Reviews — a shorter decision and statement, with no full new forecast set. Monetary Policy Reviews were called "OCR Reviews" before June 2020; you may still see the older name used elsewhere.

MPS vs. MPR: A Monetary Policy Statement (MPS) is a legislatively required quarterly publication accompanying four of the seven annual OCR decisions; it sets out the Committee's updated projections for inflation, output and the OCR track, and is followed by a press conference. A Monetary Policy Review (MPR) — renamed from "OCR Review" on 23 June 2020 to reflect that the Committee can also deploy tools beyond the OCR — delivers the rate decision with a shorter statement and no full projection round. The Committee can also act outside the scheduled calendar if conditions warrant.
Decision DateTypeStatusOutcome
April 8, 2026Monetary Policy ReviewCompletedOCR held at 2.25%
July 8, 2026Monetary Policy ReviewCompletedOCR raised 25bp to 2.50% — first hike since May 2023
September 2, 2026Monetary Policy StatementCompletedOCR raised 25bp to 2.75%
October 28, 2026Monetary Policy ReviewScheduledInterim decision, no full projections
December 9, 2026Monetary Policy StatementScheduledFinal MPS of 2026, full projection update

Dates and outcomes above are drawn from RBNZ public announcements. See the RBNZ's own decision calendar for the authoritative schedule.

Market Conditions Market Analysis & Economic Context

Current Situation

After cutting the OCR repeatedly through 2024 and 2025 and then holding it steady in early 2026, the RBNZ began raising the OCR again in mid-2026 — a quarter-point rise in July followed by another in September — as inflation pressure proved more persistent than expected. Markets are watching upcoming decisions for signs of whether that hiking cycle continues.

Key Factors to Watch
  • New Zealand consumer price inflation relative to the 1–3% target band
  • The housing market, where most mortgages are floating or fixed for only six to eighteen months, so OCR changes flow through to households quickly
  • Dairy and other commodity export prices, a major swing factor for the New Zealand dollar and national income
  • Net migration flows, which move labour supply and housing demand quickly in a small economy
Current Market Sentiment

New Zealand entered 2026 exiting an easing cycle: after a run of cuts through 2024–2025 that took the OCR down to 2.25% and a subsequent hold, the Committee delivered back-to-back 25bp hikes in July and September 2026, taking the OCR to 2.75%, as it judged medium-term inflation pressure had not eased as fast as required. Forward guidance from the September Monetary Policy Statement flagged the possibility of a further quarter-point move before year-end, contingent on incoming data.

Key Market Drivers
  • Fast monetary transmission: the bulk of New Zealand mortgage debt is on floating or short (6–18 month) fixed terms, so OCR changes reach household cash flow faster than in economies dominated by long-dated fixed mortgages
  • Terms-of-trade sensitivity: dairy (led by Fonterra's global dairy auction pricing) remains the largest single export category, so global dairy prices move the NZD and rural incomes materially
  • A small, open, floating-currency economy with outsized exposure to conditions in Australia and China, its largest trading partners
  • Net migration swings, which have driven large, fast-moving shifts in housing demand and labour supply in recent cycles
What This Means

New Zealand's economy reacts to interest rate changes faster than most — largely because so many mortgages reset within a year or two, rather than locking in a rate for decades. That makes the OCR a relatively powerful and fast-acting policy lever, but it also means households feel rate changes sooner.

RBNZ's Main Tool
  • The Official Cash Rate: the RBNZ's primary lever under normal conditions
  • Communication: the Monetary Policy Statement and press conferences shape expectations between OCR moves
  • Other tools: the RBNZ can, in unusual circumstances, use other instruments (as used during the 2020–21 pandemic response), which is part of why the "OCR Review" name was retired in favour of "Monetary Policy Review"
Policy Transmission Channels

New Zealand's interest-rate channel is unusually fast relative to economies with long-duration fixed-rate mortgage markets (such as the US), because a large share of household debt reprices within 12–18 months of an OCR move. This compresses the typical monetary policy transmission lag and makes housing-market and household-consumption responses to OCR changes more visible sooner in the data.

Structural Considerations
  • Exchange rate channel: the floating NZD absorbs much of the adjustment to external shocks, with commodity terms-of-trade a first-order driver
  • Small open economy: New Zealand is a price-taker in most tradable goods and services markets, so imported inflation and global commodity cycles matter disproportionately
  • Housing wealth effects: house-price cycles interact strongly with consumption given high homeownership rates and mortgage-linked household balance sheets
  • External balance: a persistent current account deficit leaves New Zealand asset prices and the currency sensitive to shifts in global risk appetite

How We Analyze the RBNZ Methodology & Data Sources

Why is RBNZ analysis different from the Fed or the RBA on this site?

For the Fed, ECB, Bank of England, RBA and a few other banks, we use futures markets that track the policy rate almost one-for-one, so we can convert prices directly into probabilities. New Zealand's most liquid short-term futures contract (ASX bank bill futures) tracks a related but different rate — one that includes a small bank-lending premium. We would rather show you nothing than show you a number that looks precise but isn't, so live RBNZ probabilities are not published yet.

When RBNZ probability coverage goes live on this site, it will use the same CME-style methodology applied to the Fed, ECB, Bank of England and RBA elsewhere on this site, adapted for New Zealand's market structure: implied OCR paths backed out of ASX 90-Day New Zealand Bank Bill Futures, which cash-settle quarterly against the Bank Bill Benchmark Rate (BKBM) under New Zealand Financial Markets Association supervision.

Data Sources & Limitations:
• Bank Bill Futures: ASX 24, cash-settled quarterly against BKBM
• Benchmark Rate: BKBM — a 3-month bank-credit rate set from the physical bank bill market, not the OCR itself
• Known limitation: BKBM embeds a bank credit/liquidity spread over the risk-free OCR path; RBNZ's own published research notes that bank bill rates are a noisier signal of market OCR expectations than overnight-indexed-swap (OIS) pricing, which this site does not currently source
• RBNZ Publications: Monetary Policy Statements, Monetary Policy Reviews, the Reserve Bank Bulletin, and the Monetary Policy Handbook
No accuracy figure is published for RBNZ. Historical accuracy statistics shown elsewhere on this site (for example, on the Federal Reserve page) come from back-testing a live probability pipeline against realized outcomes over many meetings. RBNZ probability coverage is new and has no such pipeline running yet, so no comparable figure exists — quoting one, or reusing another bank's accuracy rate, would misrepresent what is actually known. This section will be updated once a genuine track record exists.
Policy Stance Model

A Taylor-rule-style benchmark comparing the current OCR to a model-implied neutral rate, computed the same way as for other banks on this site. This is a simple cross-bank benchmark, not a reproduction of the RBNZ's own macroeconomic model (NZSIM).

N/A
Model-Implied Rate
N/A
Gap vs. OCR

Policy stance updated in static build.

IndicatorCurrentTarget/ReferenceGap
InflationN/AN/AN/A
Output GapN/A0.00%N/A
UnemploymentN/AN/AN/A

New Zealand Economy Basics Economic Context & Structural Factors

What makes New Zealand's economy distinctive?

  • Small and open: trade is a large share of GDP, so global prices and demand matter a lot
  • Agricultural export base: dairy, meat and forestry products dominate goods exports
  • Fast-reacting housing market: most mortgages reprice within a couple of years, so rate changes are felt quickly
  • Inflation-targeting pioneer: New Zealand introduced the world's first explicit inflation target in 1990

These factors mean OCR decisions tend to show up in the New Zealand economy — and in mortgage bills — faster than equivalent decisions do in many larger economies.

Structural Economic Characteristics
  • Trade Openness: goods and services trade equivalent to roughly half of GDP
  • Export Composition: dairy is the largest single goods-export category, alongside meat, forestry, horticulture and wine
  • Housing & Mortgages: the large majority of mortgage lending is floating or fixed for terms of six months to two years, unlike the long-dated fixed-rate mortgages common in the US
  • Monetary History: the Reserve Bank of New Zealand Act 1989 made the RBNZ the world's first central bank with an explicit, legislated inflation target
Policy Considerations
  • Terms-of-Trade Volatility: commodity price swings (especially global dairy prices) move national income and the exchange rate
  • Net Migration: large, fast swings in migration flows shift housing demand and labour supply quickly given New Zealand's small population base
  • External Balance: a persistent current account deficit leaves the NZD sensitive to shifts in global investor risk appetite
  • Small-Economy Amplification: shocks that would be diversified away in a larger, more diversified economy can move New Zealand-wide indicators more visibly
Key Relationships:
• Fast transmission: OCR changes reach a large share of mortgage holders within 12–18 months, faster than in long-fixed-rate mortgage markets
• Trade exposure: Australia and China are New Zealand's largest trading partners, linking the domestic cycle to conditions in both
• Currency channel: the floating NZD is a first-order shock absorber for terms-of-trade and risk-appetite swings
• Forecasting framework: the RBNZ's own core macroeconomic model, NZSIM, is a structural model used for the Bank's internal forecasting and policy analysis — distinct from the simple Taylor-rule benchmark shown on this page

Frequently Asked Questions

The market-implied odds of a hike, hold, or cut at each upcoming RBNZ Official Cash Rate decision are shown live on this page, broken out by date and recalculated daily from ASX 90-Day New Zealand Bank Bill futures using a step-function bootstrap. Because those contracts settle on the 90-day bank bill rate rather than the OCR itself, every figure is shown with the constant bank-bill-spread caveat explained on this page and should be read as directional.

The Official Cash Rate is the interest rate the Reserve Bank of New Zealand sets to influence short-term wholesale interest rates, and through them the broader economy, in pursuit of its price-stability mandate. It is reviewed by the Monetary Policy Committee at scheduled decisions throughout the year.

A Monetary Policy Statement (MPS) is published four times a year and includes the OCR decision alongside a full set of updated economic projections and a press conference. A Monetary Policy Review (MPR) — the interim decision at the RBNZ's other scheduled meetings, formerly called an OCR Review — announces the OCR decision with a shorter explanatory statement and no full new forecast set.

The Monetary Policy Committee holds seven scheduled OCR decisions a year, four of them Monetary Policy Statements. The next scheduled decision date is shown on this page.

Because none has been calculated yet. An accuracy figure requires a validated back-test against realized outcomes, which in turn requires a live probability pipeline running for a meaningful stretch of meetings. RBNZ coverage on this site is new; we will publish a track record once one exists rather than borrow a number from another bank's page.

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