News about RBNZ

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.

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 In an unpublished 2026 survey, fewer than 25% of New Zealanders spontaneously mentioned inflation or interest rates when asked about the RBNZ's responsibilities.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.