MUFG’s Senior Currency Analyst Lee Hardman notes that the Reserve Bank of New Zealand is widely expected to keep the Official Cash Rate unchanged at its first 2026 meeting (Feb 18), after signalling November’s cut was the last of the cycle. However, markets have started to price a possible rate hike by Q3, making any hawkish change in guidance a key focus for NZD traders.

Policy on hold but hike risk priced

"The RBNZ will hold its first policy meeting of 2026 this week. The central bank is widely expected to leave the OCR on hold, having delivered what was signalled to be the final rate cut of the easing cycle in November."

"The RBNZ has indicated that rates are likely to remain unchanged throughout 2026, but markets have already begun to price in the possibility of a rate hike as early as Q3 this year."

"As a result, market participants will be watching closely for any signs of a hawkish shift in the RBNZ’s policy guidance."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)