The RBNZ has itself forecast (in its May Monetary Policy Statement) a peak in the OCR of just under 4% by the middle of next year. Read more: ASB flooded with special home loan rate applications. The current forecast says the Official Cash Rate (OCR) could peak as high as 5.5% as the RBNZ continues its battle against rampant inflation, which would mean weve got another 1.25% to climb from the current level. "In regards to the property market, the prospect of a stable official cash rate for at least the next year or so suggests no major upwards pressure on mortgage rates until the second half of 2022 although of course global financial market shifts can have a significant influence too, as well as upside inflation surprises within NZ. The OCR has been steadily increasing since October last year in an ongoing bid to tackle inflation of 7.3%. The inflation and employment data have turned slightly, but not to an emphatic degree, yet. ASB, ANZ, and BNZ also released their forecasts - expecting the OCR to reach 0.5% next month, according to Stuff.. ASB chief economist Nick Tuffley said the RBNZ had "clearly changed tack . But 2021 has been a turning point. Monetary Policy Reviews are more of an interim update, or check-in, between MPS announcements. ASB releases OCR and mortgage rate forecasts | NZ Adviser It's predicted to rise by another 1.25% in 2023. Or, your browser is blocking ad display with its settings. 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Report 5 May - FSR Media conference & Inflation is now back above 3%, and we expect it to press higher over late 2021/early 2022. Industry releases forecasts following OCR announcement | NZ Adviser But is it now going to run out of ammo? In return, we'll give your team access to pro news tools and keep Scoop free for personal use, because we believe public access to news is important! "The data that we have had suggests that near-term inflation is a growing headache for businesses and households. The RBNZ is set to deliver the announcement on Wednesday, with a mid-tier raise widely expected amongst analysts. The five-year term deposit rate has more than doubled, from 1% to over 2% (at the time of writing). Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search. KiwiSaver and investment funds providers offer a range of choices to investors. Please don't interpret the order in which products appear on our Site as any endorsement or recommendation from us. Economists at ASB see the change in wording, and new OCR track, as signs the central bank is moving further away from another potential rate cut, and towards future rate rises. After sitting at 0.25 percent for months during the pandemic, a series of consecutive 25 basis point increases since October last year has seen the OCR reach 1 percent and it's widely anticipated to continue to rise, likely meaning a jump in interest rates. The Reserve Bank has double-pumped the Official Cash Rate with its surprise 50 basis point hike in an effort to blindside the markets. We endeavour to ensure that the information on this site is current and accurate but you should confirm any information with the product or service provider and read the information they can provide. US Treasury yields fall post CPI but then reverses much of that price action, NZ's largest bank raises fixed and floating home loan rates, savings account rates, and term deposit rates in a broad response to the recent RBNZ OCR rises, Mortgage rates were unmoved by the RBNZs big hike as traders bet any increase now will be matched with a cut later, US Treasury yields push higher, ahead of key CPI data tonight. "The Reserve Bank is between something of a rock and a hard place," ANZ said in its report. Events calendar - Reserve Bank of New Zealand - Te Ptea Matua New Zealand's central bank - Reserve Bank of New Zealand - Te Ptea Matua See what promotions banks are offering.If the rate risesYour rate wont rise as you locked it in, so you can relax a little. Infometrics economists mull quantitative easing in 2020. How we release information - Reserve Bank of New Zealand It is clear that the OCR needs to go up. The 2021 release dates are: Monetary Policy Statement / Official Cash Rate announcements 24 February - OCR & MPS Media conference & live-stream 14 April - OCR 26 May - OCR & MPS. Rate leaps and Christmas creep | The Spinoff We recommend seeking professional investment and/or mortgage advice before taking any action. Read More Major banks do U-turn, now expect no change in OCR - NZ Herald The Reserve Bank reserves the right to make changes to this schedule, if required. The release dates in full for the period until July 2022 are: The Reserve Bank will make an announcement on the official cash rate today with many economists expecting it to jump up to 50 basis points to 3%. This was also expected in financial markets; and furthermore, economists and analysts have already been talking that this is the start of a rising period for interest rates. Your rate wont rise as you locked it in, so you can relax a little. - OCR & MPS Media conference & live-stream 14 April - What will this mean for you? Needs analysis focus: what data do you need? As a result, rates dropped to their lowest level on record, going back to the 1960s. Kiwi homeowners should brace for yet another increase to the cash rate, according to this months Finder RBNZ Official Cash Rate Survey. Like other central banks RBNZ is very likely to tighten the stance of monetary policy further. MPS/OCR review dates will shift to, release of each MPS at 3pm and FSR at 11am. Copyright Squirrel Group Limited 2023. releasing its quarterly Monetary Policy Statements (MPS), If you decide to apply for a product or service through our website you will be dealing directly with the provider of that product or service and not with us. See what promotions banks are offering. In such an event, the markets and the Related to this, when interest rates change, it can lead to volatility (ups and downs) in sharemarkets and property markets. Central bank will make OCR announcement this week. Official Cash Rate announcements 24 February How? OCR | interest.co.nz You can also search our past events. It's predicting a 50 basis point increase, which would be the largest increase to the OCR since May 2000. Compare accounts and ensure youre aware of whats on offer in the market. Learn about how the OCR has changed over time What is maximum sustainable employment Our Chief Economist explains why we increased the OCR Video transcript: Official Cash Rate (OCR) explainer Audio: Kia ora, I'm Paul Conway, Chief Economist at the Reserve Bank of New Zealand. New Zealand, 69% expect the cash rate to peak between 5% and 5.25% early this year, Half of Kiwis could only live off their savings for a month if they lost their job, All economists predicted another increase to the OCR in February, Formulate and implement monetary policy to maintain price stability and support maximum sustainable employment, Promote the maintenance of a sound and efficient financial system. If already paying more than the minimum payment on your home loan, drop payments to the minimum (if possible) if your budget is tight. They may do too much. Reserve Bank lifts Official Cash Rate 50 basis points to 5.25% saying severe weather events have led to higher prices for some goods & services, US JOLTS labour market report shows much weaker demand for labour - US Treasury yields down 6-12bps, equities weaker, USD weaker. We can help. arises with other important releases or events. advance. ASB has released its forecasts on the official cash rate (OCR) and mortgage rates ahead of the Reserve Bank of New Zealands (RBNZ) next announcement, quarterly Monetary Policy Statements (MPS), and six-monthly Financial Stability Reports (FSR). Copyright 1996-2023 KM Business Information NZ, Hike it like it's hot: RBNZ expected to lift rates by historic 75 bps, Reserve Bank makes its September rate call, Avanti Finance named best non-bank at the NZMAs, Kiwibank: Strong demand for labour remains, but will wane as the economy slows, FinPOWER appoints Australian general manager. While we are independent, the offers that appear on this site are from companies from which finder.com receives compensation. According to the Kiwibank team, 60% of NZ mortgages are either floating or up for re-fixing in the next 3-6 months, while 80% will refix in the next 6-12 months. The Official Cash Rate, or OCR as it's usually referred to, was cut to just 0.25% in March 2020 - the lowest it's ever been. If they dont pass on the full rate cut, ask for a rate discount, and if youre still not happy start comparing what other deals are in the market.If the rate holdsCompare other variable-rate mortgages to make sure youre still getting the best deal. And why did the Reserve Bank lift it today? ads. Financial Stability Westpac also believes it will be a 25 basis point lift. conflicts with other important releases or events. If this happens, you might want to compare the rates of high-interest savings accounts. The OCR is set by the Reserve Bank of New Zealand whose aim is to keep prices stable. If they dont pass on the full rate cut, ask for a rate discount, and if youre still not happy start comparing what other deals are in the market. The biggest problem at the moment is the government and mismanagement the management of the border has been a joke.. While we share the RBNZs view that the OCR will move up in 2022, their pace of hikes over the next few years is larger than what we envisage.". I believe the RBNZ will hike in February and April, and then pause. StatsNZ revealed in January that inflation in the year to December 2021 had hit 5.9 percent, the highest annual increase since 1990. But it also shows that monetary policy moves to date are getting the intended traction via the housing market. While there are positive signs that inflation is no longer increasing, it remains well above the Reserve Bank remit to keep inflation between 1% and 3% on average over the medium term. JGBs rally, BNZ chief economist Mike Jones thinks the RBNZ has made progress bringing the runaway economy back under control, Auckland University's Tim Hazledine offers a range of suggestions to help the Reserve Bank fight inflation, Global rates lower after their recent rise; Treasury yields down 5-7bps, German 10-year rate falls for first time in over two weeks. The labour market is tight as a drum.". San Francisco-based First Republic is the third midsize bank to fail in two months. day after the monetary policy announcement. However next year plays out, well be watching closely - with plenty of commentary over on the Squirrel blog to help make sense of what the Reserve Bank announcements mean for Kiwi homeowners and our housing market. Your rate wont change because its locked in, but if youre nearing the end of your term, start comparing both high-interest savings accounts and term deposits to find a good deal. The Reserve Bank today announced the 2021 dates for The OCR is one of the key levers that the RBNZ can use to influence the economy. OCR currently at 4.75% Next RBNZ OCR announcement: 05 April 2023 We asked our panel of experts to have their say on New Zealand's property market, the possible extension of the travel bubble, and more. Earn better returns and have access to your money with no penalties. OCR reaction: Rates set to rise from 2022 - DepositRates.co.nz See our visualised stats on Coinbases users base, trading volume, revenue and income. Credit Suisse: Why New Zealand is safe from bank run contagion, RBNZ Survey: Almost all experts confident the OCR will rise to 4.75%, RBNZ Survey: 75% of experts expect the cash rate to peak between 4% and 4.5%, RBNZ Survey: 82% of experts believe inflation has hit its peak, RBNZ Survey: 73% of experts expect a recession before 2025, RBNZ Survey: Brace for rate rise as experts agree hike imminent, 8 for April: How to deal with NZs school holiday horror, On the brink: 3 million Kiwis experiencing financial stress, Finder Global Crypto Trading Platform Awards 2023, How to buy Credit Suisse Group (CS) shares, How to buy FLOKI Inu (FLOKI) in Term deposit rate increases are starting to filter through although they are limp new offers with banks falling further behind the OCR policy signals, Weaker US PPI inflation, higher jobless claims play to theme of weaker US economy and moderating inflation pressures, adding in expectations of just one more Fed rate hike, USD remains under pressure; US Treasury yields slightly higher, The banks are demonstrating that they won't hike interest rates just because the Reserve Bank would like them to - so it might be better for the RBNZ to adopt more of a waiting game, US CPI rises just 0.1% m/m; core up 0.4% - strong enough to maintain expectations for another likely Fed hike next month. The low-risk options are weighted towards cash and income assets: things like government bonds and other fixed income investments. The RBNZ's assertive tightening to date is working, and the risk now is titled towards overtightening. release dates are:Monetary Policy Statement / RBA opts for a pause, Higher oil prices drive global rates higher but reversal follows after weak US ISM manufacturing report; net change in yields is lower. credit card debit, $30 per user - Pay by monthly How strong they will be depends on the RBNZ's assessment on inflation developments, so we might see a slowing down in the magnitude of the increases, but increases are still on the agenda. We noticed that you're using an ad blocker. in principle, around two weeks later compared with the "On the one hand, the path ahead for the economy is looking anything but smooth, with house prices falling and consumer confidence pummelled as household budgets are squeezed. Copyright 1996-2023 KM Business Information NZ, ASB flooded with special home loan rate applications, ASB warned over responsible lending failures, Mortgage wars: ASB matches rivals with new home loan rates, Avanti Finance named best non-bank at the NZMAs, Kiwibank: Strong demand for labour remains, but will wane as the economy slows, FinPOWER appoints Australian general manager. Because your rate is fixed for an agreed period, a decision by the RBNZ to hold wont have as much of an effect on you depending on how long you still have to go in your fixed term. Carry out a quick comparison to make sure youre getting the best return on your money. Moreover, forward economic indicators are weak. He Tipu Ka Hua Fund Opens To Advance Mori-led Research, Counting Carbon - NZ Contributes To Global C02 Stocktake. review dates will be continuously published on the Reserve When the RBNZ gets closer to actually changing the OCR setting, the upward pressure will come on the shorter terms and floating rates too.. "Inflation is far too high. See more of ASBs latest financial news and announcements here on our blog. The RBNZ's next OCR announcement, and the last one for the year, is coming up on the 23 rd November. The growth assets like property and shares are influenced by the broad economic backdrop and that includes interest rates. As mentioned above, you still might want to monitor other deals in the market to keep informed. The latest quarterly inflation stats last month didn't exactly deliver the news the market (or anyone to be honest) was hoping for - with inflation tracking at 7.2%, as opposed to the 6.5% that was anticipated. There are risks to raising the OCR in large increments, mostly with the housing market, ANZ said, but "the RBNZ now has to play the hand it's got". A move to 3% today would be a seven year high. $35 per user - Pay by monthly recent labour market data into its forecasts when the Inflation remains elevated and beyond the target of RBNZ. Announcements will be made as usual at 2pm for 2020 remain unchanged. Analysts at CoreLogic said the outlook for interest rates remained stable for now, but borrowers may look to lock in longer-term rates, amid a growing expectation of higher interest rates in the next 18 months. Create a SUPPORTER account with no ads New inflation figures out in the coming week are likely to show us having an annual rate of inflation in excess of 7% for the fourth consecutive quarter - but will there be signs that we can expect prices to start easing soon? Core inflation is far too high. As the economy has recovered, the need for extremely low interest rates has reduced, and the process of raising the OCR has begun. If rates rise, savings accounts rates could increase as well. Inflation pressures are not as bad as feared in November but still clearly too high, and its not clear that the RBNZ has done near enough yet. This supported US Treasuries, with US 10-year rate down 10bps to 3.42%. current guidelines. ASB economists latest OCR forecast also suggests that mortgage interest rates are likely to settle at historically low levels, but slightly higher than the economists previous forecasts. Indeed, there could well be a slowly building trend for more borrowers to fix for longer periods in the coming months, to provide a hedge against rising rates.". National's finance spokesperson Nicola Willis said the government's . These will be published on the Reserve Bank's A lot can change, however, and a more strident path of OCR hikes in 2022 and then OCR cuts in 2023/24 is a distinct possibility.". Inflation expectations are far too high. the Reserve Bank reserves the right to make changes to this Squirrel Mortgages has a Shopper Approved rating of 4.7/5 based on 1762 ratings and reviews. Privacy Policy, Mark your calendars: Key OCR dates for 2023, sense across the market is that it wont need to get that far. The RBNZ today opted to maintain monetary policy settings and keep the official cash rate at 0.25%. change helps the Reserve Bank fully incorporate the most The OCR has been steadily increasing since October last year in an ongoing bid to tackle inflation of 7.3%. Find out how major crypto exchanges and brokers fared in 2023s Global Crypto Trading Platform Awards. Sign up to get all the latest articles direct to your inbox. NZD re-tests sub-0.62 level, NZIER's Christina Leung explains how higher interest rates are impacting New Zealand businesses and why profits aren't driving inflation, BNZ's head of research says the RBNZ should have opted for a smaller Official Cash Rate rise and caution that further rate rises might be needed; approach taken 'will most definitely generate heightened volatility', Weaker US ADP employment and services ISM data push US Treasury yields lower. The inflation outlook, while highly uncertain over the medium term, is worryingly high at present. Term deposit rates have started to increase, at last. Please appreciate that there may be other options available to you than the products, providers or services covered by our service. Westpac Bank's latest report said that financial markets have been quick to anticipate the next phase of monetary policy and were pricing in cuts to the official cash rate (OCR) as early as the second half of 2023. See how the official cash rate changes can affect your savings, term deposits, mortgages and what you can do about it.Variable (floating) mortgagesHigh interest saving accountsFixed-rate mortgagesTerm depositIf the rate risesAsk your lender for a rate discount so that if rates do rise you wont be worse off, or alternatively, compare other variable or even fixed-rate mortgages to find a better deal.If the rate gets cutSee how your lender responds to the cut. It comes as unemployment, forecast to drop from 4.7 percent to 4.4 percent . If your fixed-rate mortgage is to end soon, start comparing what deals are on offer, so you dont find yourself scrambling to lock in another rate.If the rate gets cutIf you feel your mortgage is no longer competitive, you might want to obtain a quote from your lender to find out possible exit costs. While we are independent, we may receive compensation from our partners for featured placement of their products or services. We asked our panel of experts to have their say on New Zealands property market, the possible extension of the travel bubble, and more. and future prospects. OCR announcement - October 2021 | ASB Blog The lender believes mortgage rates have bottomed out, and believes there may be a "strong bout of mortgage related fixing in coming days as households (may) rush in to lock in fixed mortgage rates". To view our disclosure statements and other legal information, please visit our Legal Agreements page here. Quarterly Monetary Policy Statements (in bold) are more in-depth - and may be where the RBNZ revises its forecasts. Ask your lender for a rate discount so that if rates do rise you wont be worse off, or alternatively, compare other variable or even fixed-rate mortgages to find a better deal. Reserve Bank of New Zealand (file photo). Consider comparing a competitive term deposit rate so your interest earnings dont suffer. For the last few months, longer term fixed mortgage rates have already been lifting in line with wholesale interest rates. But now theyve set us firmly on track for a recession, and with more and more Kiwi cutting back on their discretionary spending in order to survive higher rates, the sense across the market is that it wont need to get that far before the economy is brought under control. RBNZ shocks with a 50bps hike. The central bank's latest announcement was notable for its lack of changes, but the RBNZ dropped wording around being "willing to cut" the official cash rate further. If the RBNZ goes aggressive on Wednesday, they are just increasingly the likelihood of a hard landing. live-stream 3 November - FSR Media conference & Central bank will make OCR announcement this week. "As expected, the RBNZ is still warning of all the challenges ahead and the need for continued policy support. Explaining its decision for moving the OCR to 2.5% the Reserve Bank said at the time that global inflation has been largely driven by supply disruptions due to Covid-19 and the Russian invasion of Ukraine, combined with an overall increase in spending worldwide. Remember that most term deposits have interest penalties if you withdraw your funds early, so bear this in mind.If the rate gets cutYour rate wont change because its locked in, but if youre nearing the end of your term, start comparing both high-interest savings accounts and term deposits to find a good deal.If the rate holdsCompare accounts and ensure youre aware of whats on offer in the market. If the economy slows down, the cash rate may be cut to support increased borrowing and spending and boost economic growth. These investments are impacted by the changes in interest rates both here and offshore that have been occurring. Find out more, TradeMe: Rents Soar For Small PropertiesTrade Me Property Sales Director Gavin Lloyd said the March 2023 figures show rents for apartments and small houses (1-2 bedroom) were soaring More>>, Seafood NZ: Welcomes Draft Industry Transformation PlanSeafood New Zealand Chief Executive Dr Jeremy Helson says the fishing industry shares the Governments vision of improving the environmental performance of commercial fisheries More>>, Reserve Bank: Proposes To Ease LVR RestrictionsThe Reserve Bank of New Zealand Te Ptea Matua is proposing to ease mortgage loan-to-value ratio (LVR) restrictions. Advice HQ founder and financial adviser David Green (pictured above right), said the RBNZ remained in catch-up mode as high inflation stayed in play, as confirmed by recent releases on unemployment rates and wage growth. Advisers concerned ahead of central bank's big decision. Last year, the RBNZs response to the COVID-19 pandemic aimed to push interest rates within the economy significantly lower, including mortgage rates. The low interest rates both here and abroad have been very positive for shares and property over recent years, including the past 12 months. The current situation in New Zealand is no exception. On 6 October, the Reserve Bank of New Zealand (RBNZ) released its Monetary Policy Review, announcing an increase in the Official Cash Rate (OCR) from 0.25% to 0.5%. by up to a week either side of review dates if a conflict But, with the NZ and global economic outlook having improved, long-term interest rates are moving higher sooner than we were predicting at the early stages of the recovery, and we expect this to continue.