The Reserve Bank of New Zealand left its official cash rate unchanged at 2.25% at its April 2026 meeting, in line with expectations, keeping borrowing costs steady amid global uncertainty. The central bank noted that recent developments in the Middle East have significantly altered the outlook, with higher oil and fuel prices pushing up near-term inflation while weighing on economic growth.
Headline inflation is projected to remain at the upper end of the 1–3% target band in the March quarter and to rise further in the near term. However, medium-term inflationary pressures are expected to be tempered by subdued domestic demand and spare productive capacity in the economy.
Economic momentum has weakened, as higher fuel costs erode household purchasing power, squeeze profit margins, and dampen business investment. The Committee reiterated that future policy decisions will remain focused on medium-term inflation, stressing that core inflation, wage growth, and inflation expectations must stay contained.
