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.
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:
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.
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.
Latest observed 90-day BKBM: 3.30% · BKBM − OCR spread applied: +55 bp
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 October 20, 2026
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:
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.
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.
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.
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.
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.
| Decision Date | Type | Status | Outcome |
|---|---|---|---|
| April 8, 2026 | Monetary Policy Review | Completed | OCR held at 2.25% |
| July 8, 2026 | Monetary Policy Review | Completed | OCR raised 25bp to 2.50% — first hike since May 2023 |
| September 2, 2026 | Monetary Policy Statement | Completed | OCR raised 25bp to 2.75% |
| October 28, 2026 | Monetary Policy Review | Scheduled | Interim decision, no full projections |
| December 9, 2026 | Monetary Policy Statement | Scheduled | Final 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.
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.
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.
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.
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.
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.
While the market-implied probabilities above show what traders expect, the theoretical rate below shows what a standard economic rule would suggest for the Official Cash Rate (OCR) given current inflation and growth.
This is a simple rule-of-thumb benchmark, not a forecast and not the RBNZ’s own model. It shows what a standard textbook rule would suggest given the latest inflation and growth data.
This benchmark applies a Taylor rule to New Zealand CPI inflation and an HP-filter output gap, and compares it with the OCR. It is a cross-bank benchmark, not a reproduction of the RBNZ’s own macroeconomic model (NZSIM).
| Indicator | Current | Target/Neutral | Gap |
|---|---|---|---|
| Inflation | 4.06% | 2.00% | +2.06 pp |
| Output Gap | -0.09% | 0.00% | -0.09 pp |
| Unemployment | 5.60% | N/A | N/A |
Inflation target is the 2% midpoint of the RBNZ 1-3% band. Inflation is the 4-quarter change in the CPI all-groups index. Unemployment is the quarterly household labour force rate, shown for context only.
Start with a neutral rate, add current inflation, then adjust for how far inflation is from target and whether the economy is running above or below its potential.
Unemployment is shown as a cross-check for labour-market slack and does not enter the formula.
See the full Taylor Rule methodologyPolicy-rule mapping: a standard Taylor rule with inflation entering in levels and as a deviation from target, and macro slack through the output gap. The result is not floored at zero, so a negative value is possible and is shown as computed.
Output gap: Hodrick-Prescott filter (lambda = 1600) on the full history of seasonally adjusted real GDP. The HP filter is biased at the end of the sample, exactly where the latest quarters sit, so the output gap is a low-confidence estimate and can be revised materially as new GDP data arrive.
Shows only the daily model runs recorded so far; no earlier history is reconstructed.
Read this with care. The neutral rate is uncertain and the RBNZ only gives a range for it; we assume a real neutral rate of 1.0% (about 3% nominal). With inflation above target, the rule suggests a much higher rate than the OCR, and moving that assumption changes the answer one-for-one.
When the actual rate is below the theoretical rate, policy is more accommodative than the rule suggests; when above, more restrictive.
Model: Taylor rule benchmark (not the RBNZ’s macroeconomic model). Assumptions: neutral real rate 1.0% (an assumption; the neutral OCR is uncertain and unobserved), inflation target 2.0%, inflation-gap coefficient 0.5 and output-gap coefficient 0.5. This is a mechanical benchmark: it ignores the RBNZ’s forward-looking projections, the exchange rate and financial conditions, and is unrelated to the bank-bill-based probabilities above.
If any input cannot be retrieved on a given day, no model is calculated and this section is not shown; no placeholder values are used.
What makes New Zealand's economy distinctive?
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.
Explore market-implied rate expectations for other major central banks: