Shadow Board recommends the Reserve Bank should keep the OCR on hold in February

The NZIER Monetary Policy Shadow Board recommends the Reserve Bank of New Zealand (RBNZ) keep the Official Cash Rate (OCR) at 5.50 percent in the upcoming Monetary Policy Statement on 28 February 2024.

The continued easing in the labour market, annual CPI inflation and the slowing in GDP growth suggest that the OCR increases to date are having the dampening effect on the New Zealand economy as the RBNZ intended. Several members pointed out that it is too soon to consider decreasing the OCR, given that domestic inflation pressures remain elevated.