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RBNZinflationNZDUSDNew Zealand
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Related tickers and likely impact
NZD/USD
▲ Likely positiveRelevance: medium
| Market | Currencies |
|---|---|
| Close on 10/21/2026 | 0.57007 |
| Change that session | +0.29% |
Impact is scored by AI from the headline and may be wrong. It is not investment advice.
Related news
- Inflation tumbles to 3 . 7 %, but expected to rise again soon
New Zealand's consumer prices rose 0.7% in the September quarter, while annual inflation eased to 3.7% from 4.1% in June, helped by a 6.5% fall in petrol prices during the quarter. International airfares, up 14.3%, were the strongest driver of the quarterly increase, and electricity prices were 9.3% higher than a year earlier. Excluding food, fuel and household energy, quarterly inflation was 1.1% and annual inflation 2.9%. However, petrol prices have since rebounded to record levels, and inflation is expected to rise as high as 4.5% in the December quarter and above 4% by year end. Markets are betting on a 25 basis point RBNZ rate hike on October 28.
- Inflation below forecast but still hot in New Zealand
New Zealand's annual inflation came in at 3.7% in the year to the September quarter, a little below forecasts but still too high, making a Reserve Bank (RBNZ) rate rise a matter of when rather than if. Petrol was the main driver, up 19% in the year to September, with the average unleaded price at NZ$3.56 a litre according to Gaspy. Inflation has been outside the target band for a year and the RBNZ has raised rates twice in the past six months, with the official cash rate now at 2.75%; a 25 basis point hike at the October 28 meeting was considered 75% likely. ASB senior economist Mark Smith expects 25bp hikes in October and December, taking the OCR to a 3.25% peak. The result is bittersweet for the National party and its governing coalition, as voting is underway for the November 7 election and cost of living remains a key issue.
- Inflation below forecast but still hot in New Zealand
New Zealand's annual consumer price inflation came in at 3.7%, a tick below expectations but still high and driven by fuel costs, down from 4.1% in the year to June. Inflation has been outside the target band for a year, and the Reserve Bank (RBNZ) has raised rates twice in the past six months. A 25 basis point hike at the October 28 meeting was considered 75% likely. ASB's Mark Smith expects CPI to stay outside the target band for at least two years, and petrol prices rose 19% in the year to September. The November 7 election makes the cost of living a sensitive political issue.
- Inflation below forecast but still hot in New Zealand
New Zealand's annual consumer price inflation came in slightly below expectations at 3.7%, down from 4.1% in the year to June, but it has stayed outside the central bank's target band for a year. Fuel was a major driver, with petrol costs up 19% in the year to September, and Gaspy reports unleaded averaging NZ$3.56 a litre. The RBNZ has raised rates twice in six months and was considered 75% likely to lift the cash rate by 25 basis points at its October 28 meeting, with ASB expecting hikes in October and December. The result is politically sensitive as voting is underway for the November 7 election, with the National party and its governing coalition facing cost-of-living pressure and polls showing a tight race.
- Inflation dip likely to be short lived
Annual inflation to the end of the September quarter is expected to slow to about 3.9%, mainly due to lower fuel prices in July and August, but the improvement is seen as temporary. Fuel prices remain painfully high, feeding into airfares and building costs, while food prices and local body rates are rising. Some economists expect annual inflation to move past 4% by year end, with ASB forecasting 4.5%, as fuel prices resurge and the New Zealand dollar weakens. Core measures are seen at the top of the Reserve Bank's target band and show few signs of easing, keeping an October cash rate hike firmly on the table. The odds of a 25 basis point rise to 3% at the October 28 review are put at nearly 90%, with a 50% chance of a further increase in December.
- RBNZ Governor Anna Breman Warns Misinformation May Weaken Monetary Policy
Reserve Bank of New Zealand (RBNZ) Governor Anna Breman warned that misinformation could distort public beliefs about the economy and weaken monetary policy as central banks work to keep inflation expectations stable. She argued that keeping expectations anchored after a supply shock may reduce the policy tightening needed to contain inflation, limiting costs to output and employment, though policymakers may still need to tighten when warranted. In an unpublished 2026 survey, fewer than 25% of New Zealanders spontaneously mentioned inflation or interest rates when asked about the RBNZ's responsibilities. Breman also raised concerns about AI-generated misinformation, such as deepfake videos and inaccurate search summaries, which make maintaining public trust harder. Stats NZ releases September-quarter inflation data on Oct 22, and the RBNZ's next Official Cash Rate review is set for Oct 28.
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