UOB Global Economics & Markets Research notes that the Reserve Bank of New Zealand left the Official Cash Rate unchanged at 2.25%, consistent with expectations. The central bank signalled that policy will stay accommodative while it monitors data, even though its projections allow for a possible hike later this year. UOB still expects rates to remain on hold for now.

Accommodative stance maintained despite hike option

"The Reserve Bank of New Zealand (RBNZ) held the Official Cash Rate (OCR) at 2.25% as expected, signaling that policy will stay accommodative for some time while it monitors incoming data."

"Although its updated OCR track allows for the possibility of a rate hike later this year, the Bank showed no urgency to tighten, emphasising support for an early-stage recovery."

"Our view remains that the OCR will stay on hold for the foreseeable future, given already-tightened financial conditions and a nascent recovery supported by earlier rate cuts."

"We will update our outlook as incoming economic data evolve ahead of the next meeting on 8 Apr."

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