February 2026 Monetary Policy Statement Media Conference

Why It Matters

Holding the OCR steadies financial conditions while the RBNZ watches inflation and labour‑market data, but the forward track signals that a rate hike could come later, influencing mortgage rates, consumer spending, and New Zealand’s growth outlook.

Key Takeaways

• RBNZ holds OCR at 2.25% as consensus decision
• Inflation expected to drop to 2% midpoint within 12 months
• Core and non‑tradable inflation easing, tradables stable due to NZD strength
• Labor market tightening with falling unemployment and modest wage growth
• Forward OCR track suggests possible rate hike later this year

Summary

The Reserve Bank of New Zealand’s February 2026 monetary‑policy conference, led by Governor Anna Breman, announced that the Official Cash Rate (OCR) will remain unchanged at 2.25%. The committee reached consensus to hold rates, citing a still‑recovering economy and a desire to keep policy accommodative while inflation moves back toward target.

Inflation has eased to 3.1% in the December quarter and is projected to fall to 2.8% this quarter, reaching the 2% midpoint within the next twelve months. Core inflation is firmly within the 1‑3% band, non‑tradable price pressures are receding, and tradable inflation is expected to soften as the NZ dollar appreciates and import prices stabilize. The labour market shows early‑stage recovery: employment is rising, unemployment, though still high, is expected to decline, and wage growth remains modest, reinforcing spare‑capacity assumptions.

Governor Breman emphasized “balanced risks” and highlighted that spare capacity will keep downward pressure on prices. In the Q&A, she noted the forward OCR track allows for a possible rate hike by year‑end, but the committee remains cautious. Analysts questioned mortgage‑rate trajectories and house‑price dynamics; the bank signaled modest house‑price gains and warned that tighter financial conditions could dampen household spending.

The decision signals that monetary policy will stay supportive for now, limiting immediate pressure on borrowers while keeping inflation expectations anchored. Markets have largely priced in the hold, but the forward track leaves room for tightening if inflationary pressures re‑emerge, affecting credit costs, housing affordability, and the broader recovery trajectory.