RBNZ Official Cash Rate Forecast

Expert analysis and predictions for the Reserve Bank of New Zealand's OCR decisions.

Last updated:

Wellington cable car

February 12 OCR update: No change

All of our experts correctly predicted the Official Cash Rate to hold at 1.0%.

13 experts and economists weighed in on future cash rate moves and economic indicators, including wage growth and housing affordability.

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.

What our experts said

  • All 13 experts forecasted the OCR to hold for February; 23% predict cut in August
  • Slowing economy and impact of coronavirus top concerns in 2020
  • House prices expected to rise by 5% in Auckland and Wellington

Read more in our pre-announcement press release


November
N/A
February
HOLD
Most central banks are taking a wait-and-see attitude.
 
November
N/A
February
HOLD
We think the majority of the coming year that inflationary pressure and deflationary pressure will balance each other out. This may give way to inflationary pressure as house prices continue to rise warranting a consideration by the RBNZ to increase the OCR.
 
November
N/A
February
HOLD
At present, we expect the Reserve Bank to maintain the OCR at its current level, with the potential for a raise in May 2020 if economic conditions permit. Although the Reserve Bank has noted it is waiting to see the full impact of the 50 basis point cut in 2019, we expect that the Bank may be required to further loosen monetary policy to combat global growth headwinds.
 
November
N/A
February
HOLD
With the property markets showing clear signs of recovery in Auckland and Hamilton (and ongoing strength in many other regions across the country), it is unlikely that the RBNZ will reduce the OCR unless we enter into a recession. The general election later this year will no doubt take some of the heat out of the property market, but as this is likely to only be a temporary effect, I don't think the RBNZ will adjust the OCR until mid-2021.
 
November
N/A
February
HOLD
Global risks.
 
November
N/A
February
HOLD
Since last November's MPS, inflation has been a bit higher than expected, and the local and global economies look a bit stronger. The Bank didn't move last time: it has even less reason to cut now, and it would be way too premature to raise. Hold likely.
 
November
N/A
February
HOLD
I think the RBNZ will give the economy one more boost to ensure they meet their dual mandate. A little more tinkering with rates will ensure the bank capital impact is negligible and confidence is bolstered into 2021.
 
November
N/A
February
HOLD
Stimulate inflation.
 
November
N/A
February
HOLD
My central expectation right now is that rates won't go up or down in 2020, and perhaps flat again in 2021 too. I've indicated a rate rise next year as a sign of the long-term trend.
 
November
N/A
February
HOLD
I believe the RBNZ will hold the OCR as it is for 2020.
 
November
N/A
February
HOLD
Core inflation is still below target and domestic demand growth will be sluggish at best. Globally things have been pretty subdued and the coronavirus (even if contained in the next couple of months) effects will be materially larger than SARS, a factor for the RB in 2003 OCR decisions.
 
November
N/A
February
HOLD
With inflation currently at 1.9 percent and economic fundamentals looking solid, there is no immediate need for the RBNZ to act. However, I would not rule a decrease later in the year in response to a likely deterioration of global economic circumstances.
 
November
N/A
February
HOLD
There is increasing evidence that growth will be sufficient to deliver on the RBNZ's growth and employment objectives without further monetary stimulus, with the housing market lifting strongly and inflation pressures rising.
 

How has the cash rate changed over time?

What is the official cash rate and who sets it?

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. The OCR is set by the Reserve Bank of New Zealand whose aim is to keep prices stable.
The RBNZ does three main things:

  • formulate and implement monetary policy to maintain price stability and support maximum sustainable employment
  • promote the maintenance of a sound and efficient financial system
  • meet the currency needs of the public.

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. If the economy slows down, the cash rate may be cut to support increased borrowing and spending and boost economic growth.

How the OCR can impact your finances

See how the official cash rate changes can affect your savings, term deposits, home loans, and what you can do about it.

If the rate rises

Ask your lender for a rate discount so that if rates do rise you won’t be worse off, or alternatively, compare other variable or even fixed rate home loans to find a better deal.

If the rate gets cut

See how your lender responds to the cut. If they don’t pass on the full rate cut, ask for a rate discount, and if you’re still not happy start comparing what other deals are in the market.

If the rate holds

Compare other variable rate home loans to make sure you’re still getting the best deal. If rates are tipped to rise in the near future you may also want to compare fixed rates.

If the rate rises

Find an account which offers the same features and fees but with a better rate.

If the rate gets cut

Consider comparing a competitive term deposit rate so your interest earnings don’t suffer.

If the rate holds

Carry out a quick comparison to make sure you’re getting the best return on your money. See what promotions banks are offering.

If the rate rises

Your rate won’t rise as you locked it in, so you can relax a little. If your fixed rate is soon to end, start comparing what deals are being offered so you don’t find yourself scrambling to lock in another rate.

If the rate gets cut

If you feel your home loan is no longer competitive, you might want to obtain a quote from your lender to find out possible exit costs. If this figure is reasonable, you might want to consider comparing variable home loans.

If the rate holds

Because your rate is fixed for an agreed period of time, a decision by the RBNZ to hold won’t have as much of an effect on you depending on how long you still have to go in your fixed term. As mentioned above, you might still want to monitor the other deals in the market to keep informed.

If the rate rises

If rates rise, savings accounts rates could be increased as well. If this happens, you might want to compare the rates of high-interest savings accounts. Remember that most term deposits have interest penalties if you withdraw your funds early, so keep this in mind.

If the rate gets cut

Your rate won’t change because it’s locked in, but if you’re nearing the end of your term, start comparing both high-interest savings accounts and term deposits to find a good deal.

If the rate holds

Compare accounts and ensure you’re aware of what’s being offered in the market.

Go to site