RBNZ Chief Economist Signals OCR ‘Most Likely Up’ Amid Soft Demand Data
| Pair | Now | Since publish |
|---|---|---|
| NZDUSD | — | — |
| AUDNZD | — | — |
- RBNZ’s Oct decision ‘wide open‘, bias ‘Most Likely Up‘.
- Conway: 25 bps hike probable, inflation target next year.
- NZ card spending falls, food prices flat, fuel costs rise.
- Mixed data, hawkish bias support NZD.
Reserve Bank of New Zealand (RBNZ) Chief Economist Paul Conway indicated that the central bank’s upcoming interest rate decision in late October is “completely open.” Conway highlighted the RBNZ’s desire to maintain optionality between holding the Official Cash Rate (OCR) and implementing a 25 basis point hike, noting that an OCR increase remains the most probable outcome despite confidence that inflation will return to its 1% to 3% target band next year. This stance keeps the prospect of a tightening move alive, providing support for the New Zealand dollar. Following the comments, the NZD/USD pair gained 0.53%, trading around 0.5630, while the RBNZ’s hawkish bias contrasts with a more dovish-leaning Reserve Bank of Australia, creating a divergence that impacts pairs such as AUD/NZD.
RBNZ Chief Economist Paul Conway stated the direction of the Official Cash Rate (OCR) is “Most Likely Up“, while reiterating the next policy meeting remains “wide open” due to inflationary pressures. He made these remarks at the IMF-World Bank Annual Meetings in Bangkok. Separately, New Zealand card spending fell for a second consecutive month, signaling soft domestic demand. Additionally, food prices held flat in September, removing an upward pressure on inflation for the month, though fuel costs were highlighted as a key concern for household budgets. This economic data presents a mixed picture for the RBNZ’s policy outlook.