Philip Wee from DBS Group Research reports NZD/USD is holding firm above 0.57 after the Reserve Bank of New Zealand unanimously voted to lift the Official Cash Rate by 25 bps to 2.50%, a shift from May’s split decision. The RBNZ still sees policy as accommodative, signals likely further stimulus reduction, and projects inflation easing back toward its 2% midpoint by mid-2027.

Kiwi supported by hawkish RBNZ

"NZD/USD is firm above 0.57 after the Reserve Bank of New Zealand countered doubts regarding its inflation-fighting resolve."

"The vote to lift the official 25 bps hike to 2.50% was unanimous, which marked a clear departure from May’s 3-3 split to hold rates."

"With the OCR level remaining accommodative, the committee signalled that 'further reduction in monetary stimulus is likely'."

"RBNZ projected that inflation will peak at 3.9% in 2Q26, slow to 3.3% in 3Q26, before declining toward 2% or the mid-point of the official inflation target of 1-3% by mid-2027."

"Two members view inflation risks as heavily skewed to the upside, while four view them as balanced following a drop in global oil prices."

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