Steady hand on the OCR

With newly appointed Reserve Bank Governor Anna Breman now settled into the role and in tune with the heartbeat of the country, the February 18 decision to hold the OCR at 2.25% ushers in a period of stability with mortgage rates remaining largely unchanged.

A year ago, we were all about OCR and interest rate easing as inflation abated and with that pretty much done and heading toward the 2% target midpoint between 1 – 3%, we’re back and on track for a long period of stable interest rates and steady growth with green shoots appearing across multiple sectors.

As pockets are filled, confidence builds and demand increases bringing employment with it.

We’re on a steady upward trajectory through ‘26 into ‘27 and beyond where along the way we reach a tipping point where we hit top gear and we’re flying again, standard issue economic cycle.

With inflation the key driver for where central banks set cash rates, the Reserve Bank’s Monetary Policy Committee have decided, starting in 2027, to shift their inflation rate reporting from quarterly to monthly and to meet eight times a year to review cash rates instead of the current seven. 

This has the effect of being more nimble and able to act quicker while still playing the long game.

The word on the street going forward is OCR remains pretty much as is with minor tweaks if anything and we may see an ever-so-small increase in about September with minimal effect but otherwise we’re in for a long stretch of stable and favourable interest rates now sitting about where they typically are with all being well in the world with geopolitical events having little effect on us.

So buckle in NZ, we’re in for a sustained period of steady growth and prosperity, we finally made it to the light at the end of the tunnel and it’s all clear from here.

For more on the above go to www.infinance.co.nz/insights

Written by Brian Coogan, Licensed Financial Adviser and Director at Infinance- Taupo