The Reserve Bank of New Zealand’s Monetary Policy Committee left the Official Cash Rate (OCR) at 2.25 percent on 18 February 2026, judging that although annual consumer price inflation ticked up to 3.1 percent in the December quarter—just above the 1–3 percent target band—ample spare capacity, subdued wage growth and contained core inflation should bring headline CPI back to the 2 percent midpoint within 12 months as the early-stage recovery firms. The hold follows 150 bp of cumulative easing between February and November 2025, culminating in the November cut to the current level. With the output gap still around –1.5 percent of potential GDP and unemployment at 5.4 percent, GDP nevertheless rose 1.1 percent in Q3 after a 1.0 percent fall in Q2, and investment and manufacturing have begun to broaden the recovery even as weak house prices and cautious households restrain consumption; average mortgage rates stand at 5.1 percent amid a recent uptick in wholesale funding costs. The trade-weighted New Zealand dollar has firmed on relatively higher domestic rates and a softer USD, while strong commodity prices continue to support rural activity. Internationally, AI-driven demand is propping up global growth, but divergent inflation paths, higher oil and precious-metal prices and persistent geopolitical and trade uncertainties keep risks finely balanced. The Committee signalled that monetary policy is set to remain accommodative for some time and will be normalised only once the rec
Reserve Bank of New Zealand 2026-02-18
RBNZ holds Official Cash Rate at 2.25% (18 Feb 2026)
The Reserve Bank of New Zealand’s Monetary Policy Committee left the Official Cash Rate unchanged at 2.25 % on 18 February 2026, saying ample spare capacity and subdued wages should return Q4’s 3.1 % inflation to the 2 % midpoint within a year. After 150 bp of 2025 cuts, the Committee signalled policy will remain accommodative until the recovery firms and inflation is sustainably on target.