Reserve Bank of New Zealand increases interest rates by 25 bps at the December 2026 meeting?

Analysis

The Reserve Bank of New Zealand has recently adopted a path of gradual monetary tightening, including a 25 basis-point increase to the Official Cash Rate in September 2026. Economic analysis from major financial institutions, such as the projection provided by Westpac, explicitly anticipates a further 25 basis-point hike at the December 2026 meeting. This outlook is supported by the central bank's current navigation of a finely balanced economic environment characterized by specific inflationary pressures. While public documentation outlines this trajectory, undisclosed sources also contribute to the assessment of the bank's policy stance. These factors collectively inform the expectation for continued rate adjustments as the bank manages its stated monetary policy objectives.

Key Evidence

Verified (FXStreet 29 Sep): October hike odds ~80% after Breman's 22 Sep oil warning; RBNZ's own track points to Oct pause + Dec hike to 3.00%; neutral 3-3.5% and policy still 'accommodative'. Markets price ~52bp across Oct/Dec/Feb, i.e. ~2 hikes in 3 meetings. CPI 4.1% and rising with oil and administered prices.

Risks

The RBNZ hikes to 3.00% on 28 October, Q3 CPI comes in no worse than expected, oil retreats, and the December MPS holds at 3.00% while signalling further tightening in February — the ANZ scenario — resolving this NO.