In remarks published by the Reserve Bank of New Zealand from a Waikato panel discussion, Dr Breman reiterated that the Monetary Policy Committee's 8 April decision to hold the Official Cash Rate at 2.25 percent reflected a judgment that the recent rise in inflation may be temporary, while the Bank remains ready to act decisively if it starts to feed into more persistent price pressures. She said monetary policy should prevent a temporary inflation increase from becoming enduring inflation and remain focused on returning aggregate inflation to 2 percent over the medium term. Dr Breman said the Middle East conflict has disrupted global supply chains and lifted prices for oil, fertilisers and other goods facing shortages, with effects varying across sectors, regions and households in New Zealand. Annual CPI inflation was 3.1 percent in the March 2026 quarter, above the 1 to 3 percent target range and slightly higher than expected at the time of the April policy decision, largely because of fuel prices, while measures of core inflation remained stable within the target band. The panel also linked global developments to business conditions in Hamilton and the wider Waikato economy, and the MPC will continue to monitor developments in the Middle East and incoming data.
Reserve Bank of New Zealand 2026-04-28
Reserve Bank of New Zealand reiterates readiness to act if Middle East shock turns temporary inflation into persistent pressure after OCR hold at 2.25 percent
The Reserve Bank of New Zealand published remarks by Dr Breman explaining that the Monetary Policy Committee’s 8 April decision to hold the Official Cash Rate at 2.25 percent reflected a view that the recent rise in inflation is temporary, while emphasising readiness to act if price pressures persist and a continued focus on returning inflation to 2 percent over the medium term. She noted that the Middle East conflict is disrupting global supply chains and lifting prices, with annual consumer price index inflation at 3.1 percent in the March 2026 quarter, above the 1 to 3 percent target range and slightly higher than expected due largely to fuel prices, while core inflation remains within the band.