RBNZ Seen Raising Rate 25bp to 2.50% as Oil Near $65 Clouds Further Hikes
Updated
Updated · ING Think · Jul 6
RBNZ Seen Raising Rate 25bp to 2.50% as Oil Near $65 Clouds Further Hikes
3 articles · Updated · ING Think · Jul 6
Summary
July 8 is expected to bring a 25bp RBNZ "insurance" hike to 2.50%, with ING seeing a 4-2 vote and warning the move may be read as dovish.
Oil near $65 a barrel has sharply undercut the bank's May assumption of $95-$105 Dubai crude, making projections for headline CPI above 4% through late 2026 look outdated.
Even so, policymakers may still tighten because inflation expectations and second-round effects remain the bigger concern, with unemployment steady and wage growth still above 3.5% after policy entered the Iran shock accommodatively.
Markets price about 18bp for July and 55bp by year-end; a hold could trigger a sharp dovish repricing, while a hike without stronger guidance may still cap NZD gains if investors treat it as a one-off.