Governor Anna Breman Explains the February 2026 Monetary Policy Statement

Why It Matters

The decision anchors monetary policy expectations, keeping borrowing costs stable while inflation trends toward target, which is crucial for household finances and business investment in New Zealand.

Key Takeaways

• OCR held steady at 2.25% to support recovery.
• Inflation expected to fall toward 2% midpoint within year.
• Job creation remains limited despite strong export price gains.
• Consumer cost pressures persist for food and electricity.
• Future rate path likely flat unless economic conditions shift.

Summary

Governor Anna Breman announced that the Reserve Bank of New Zealand’s Monetary Policy Committee kept the Official Cash Rate unchanged at 2.25% in its February 2026 meeting, emphasizing a cautious stance aimed at sustaining the nascent economic recovery.

The committee highlighted that inflation, while still above target, is projected to ease toward the 2% midpoint over the next twelve months, allowing rates to remain on hold. Despite robust export prices, job growth remains sluggish, especially in major urban centres, and households continue to feel pressure from higher food and electricity costs.

Breman noted, “We know that many New Zealanders are feeling stretched right now,” and added that businesses are beginning to show optimism, with investment plans and hiring prospects improving as price growth moderates.

By maintaining a steady OCR, the RBNZ signals confidence that current policy is sufficient to guide inflation back to target without jeopardising recovery, offering predictability for borrowers, investors, and policymakers alike.

Original Description

rbnz.govt.nz