Reserve Banks keeps OCR on hold

Posted by Andrew on October 28, 2026

In what most would call a surprise move...... The Reserve Bank (RBNZ) has announced the Official Cash Rate (OCR) will be held at 2.75%.

Inflation remains outside the Reserve Bank’s target band of 1-3% – coming in at 3.7% in the 12 months to the September 2026 quarter. Ongoing rises in global oil prices and a low Kiwi dollar have pushed local petrol prices back to record levels recently.

Local economists were predicting a 25-basis-point hike, taking the OCR from 2.75% to 3%.

The Monetary Policy Committee warned that sustained higher refined fuel prices and exchange rate depreciation could risk larger indirect effects on inflation.

It could also increase the potential for second round price effects through wage and price-setting behaviour. However, it also noted that the pass-through of higher costs was "state-dependent and continuing weak demand could limit these effects".

In other words, the sluggish state of the economy may continue to keep inflation in check.