So, what is the OCR? Kiwi homeowners should brace for yet another increase to the cash rate, according to this months Finder RBNZ Official Cash Rate Survey. here. The release dates in full for the period until July 2022 are: Read More Major banks do U-turn, now expect no change in OCR - NZ Herald Infometrics economists mull quantitative easing in 2020. advance. In such an event, the markets and the media would be given as much notice as possible. 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. Read more: ASB flooded with special home loan rate applications. "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. second Wednesday in April, July, and Reuters surveyed 23 economists ahead of the RBNZ's Wednesday's cash rate announcement, with more than 60% expecting a 75 basis-point hike, taking the OCR to 4.25%. 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. We think that's fair, because your organisation is benefiting from using our news resources. current guidelines. 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%. Copyright Squirrel Group Limited 2023. When it is adjusted, it is usually done in 0.25% increments, as we saw this month. As anyone living off a lump sum of savings knows, over the last year term deposit and savings rates have been super low. . It comes as unemployment, forecast to drop from 4.7 percent to 4.4 percent . How we release information - Reserve Bank of New Zealand That decision wont be helped by the unusually light data flow between reviews," the banks says. The inflation and employment data have turned slightly, but not to an emphatic degree, yet. - OCR & MPS Media conference & live-stream 14 April - Millions of Kiwis are living in a state of financial stress, according to new research from global comparison site Finder. Your rate wont rise as you locked it in, so you can relax a little. 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. See what promotions banks are offering. China credit growth strong, US Treasury yields higher after solid non-farm payrolls report; other labour market data show clearer weaker trends. 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. Reserve Bank bumps OCR up to 4.75pc despite Cyclone Gabrielle's It would be the biggest increase since the OCR was introduced in 1999 - and there is still a real chance New Zealand could fall into a recession. After being hit by one bumper interest rate increase after another (after another) this year, well bet were not the only ones wondering what the Reserve Banks got in store for us in 2023. My advice for potential first home buyers is dont fear higher interest rates as you will be borrowing less than the market at its peak., Read more: Reserve Bank makes its September rate call. Please appreciate that there may be other options available to you than the products, providers or services covered by our service. The official cash rate now sits at 4.25%, the highest in 14 years. 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. This supported US Treasuries, with US 10-year rate down 10bps to 3.42%. Needs analysis focus: what data do you need? 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. 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. Finder ROW Pty Ltd (ABN 38 624 431 750) provides factual information on and compares many, but not all, products and services. Our daily newsletter is FREE and keeps you up to date with the world of mortgage. I think enough is done already as inflation will begin to ease. 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. Consider comparing a competitive term deposit rate so your interest earnings dont suffer. For a few months back in 2020, economists were warning the OCR could go to the unprecedented rate of zero. I believe the RBNZ will hike in February and April, and then pause. MPS/OCR Starlink For Scott Base But No Phones During Dinner! Savers may be better off looking at challenger banks than the big banks, NZD/AUD recovers after strong Australian jobs report; NZD crosses recover, The Reserve Bank needs to show greater patience, NZD/AUD continues to drift lower and NZ/EUR falls to fresh two and a half year low, Backfire! The ASB team added: "We were a little surprised to see the bank be so forthcoming, with the publishing of an OCR track signalling rate hikes, an acknowledgement that the OCR cannot remain at emergency levels forever. A timeline of our past monetary policy and Official Cash Rate (OCR) announcements. See more of ASBs latest financial news and announcements here on our blog. There is likely to be a further increase in the OCR, but it will be lower than the largest single hike (75 basis points) made last November. If the economy overheats and inflation rises to an unacceptable level, the RBNZ may increase the cash rate to discourage excessive borrowing and tackle rising inflation. website. Only eight economists. 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. Skip ahead to read the latest analysis, see how the OCR has changed over time and learn more about how the official cash rate affects you. The Reserve Bank reviews the OCR seven times each year, to make sure its at the right level. ASB has released its forecasts on the official cash rate (OCR) and mortgage rates ahead of the Reserve Bank of New Zealand 's (RBNZ) next . Only a significant drop in inflation would avoid an increase in the OCR. 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. Inflation is now back above 3%, and we expect it to press higher over late 2021/early 2022. Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search. See what promotions banks are offering.If the rate risesYour rate wont rise as you locked it in, so you can relax a little. The inflation outlook, while highly uncertain over the medium term, is worryingly high at present. Official Cash Rate announcements 24 February 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. If this figure is reasonable, you might want to consider comparing variable mortgages.If the rate holdsBecause 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. Discovery) - All Rights Reserved, By subscribing you agree to our Terms of Access and Privacy Policy, would be the largest increase to the OCR since May 2000, revealed in January that inflation in the year to December 2021, found inflation could be "moon-bound" giv. And firms' pricing intentions, which have been the best inflation indicator of all, are stratospheric and at this point, still rising.". Today's announcement has prompted Kiwibank economists to move forward their prediction for OCR hikes to May 2022. review dates will be continuously published on the Reserve Interest rates will need to remain high for a time until inflation is clearly back on a path towards the target. NZ curve flattens; market sees a good chance of easier policy in the second half, when the economy is likely to be deeper in recession. We noticed that you're using an ad blocker. Please help us keep it that way by allowing your browser to display ", 'Not going away': Kiwis need tighter budgets as retailers plan price increases - economist, Copyright 2023 Discovery NZ Limited (Warner Bros. Although inflation is coming down it continues to be unacceptably high around the globe. From 2021, the Bank is adopting a ANZ's Business Outlook in March found inflation could be "moon-bound" given that nearly all surveyed businesses expected higher costs in the coming months, which flows on to increases in prices for consumers. 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. Statistics New Zealand says the cost of living for households rose 7.7% in the year to March 2023, boosted by higher rents and interest payments and increased grocery food, fruit and vegetables prices, New Reserve Bank mortgage figures show homeowners paid close to $4 billion in interest during the March quarter, while total scheduled repayments topped $6 billion for the first time since the RBNZ started publishing this data, Softer than expected German CPI, GDP and Euro area GDP data drive German Bunds down 14-15bps. $35 per user - Pay by monthly New Zealand's central bank - Reserve Bank of New Zealand - Te Ptea Matua LVR tweaks substantive for owner-occupiers, Adviser returns from 15-year absence to much tougher finance market, Some good and bad news on the inflation war, Demand for mortgages continues to decline: RBNZ, Bank profits level out mortgage arrears rise, Passive managers piggy backing off active manager, Employers including KiwiSaver as part of pay packets instead of on top. 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. If this happens, you might want to compare the rates of high-interest savings accounts. "Inflation is far too high. Central bank will make OCR announcement this week. Financial Stability That means its decreasing the value of your money faster than the interest rate is growing it in a term deposit. ASB expects more OCR increases over the year ahead; we think the OCR will rise from its new setting of 0.5%, to 1.5% by the end of 2022. But occasionally the RBNZ makes larger adjustments. Most of those choices fall on a risk spectrum, where customers can choose low risk and low returns, or higher returns with higher risk. It's a big day for economic news as the Reserve Bank (RBNZ) gets set to announce the official cash rate (OCR) and Treasury opens the government's books, releasing the Crown accounts for the. Do not reproduce in any form without permission, even if you have a paid subscription. Term deposit rates have started to increase, at last. Under this new rule: MPS - Reserve Bank to make official cash rate announcement today 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. OCR | interest.co.nz As a result, rates dropped to their lowest level on record, going back to the 1960s. The OCR is one of the key levers that the RBNZ can use to influence the economy. Leading bank forecasts three cash rate rises this year | Newshub If you're already a Supporter, please use the Currently the OCR sits at 2.5% after the Reserve Bank's last announcement on July 13. 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. These two factors signal the need to continue applying contractionary monetary policy. change helps the Reserve Bank fully incorporate the most At best, it has plateaued around 7.2% which leaves a substantial gap to the current OCR. BNZ agrees it's a "coin toss" but is leaning towards 25 basis points as well. OCR decision: How high will the Reserve Bank take the - Newshub Now that the October OCR increase is confirmed, and more increases are expected, it is likely to maintain the upwards pressure that have been on long term fixed mortgage rates all year, and could well lead to short term rate increases, including the variable mortgage rate. A move by the Reserve Bank of New Zealand to raise the official cash rate by 0.75% would be a step too far, according to some mortgage advisers. How? See our Investor Hub for market commentary and the latest investment insights. Sign up to get all the latest articles direct to your inbox. Get two weeks free access to NBRs Premium Online Subscription, which includes full access to all of NBRs great content on any device. conflicts with other important releases or events. The Reserve Bank has double-pumped the Official Cash Rate with its surprise 50 basis point hike in an effort to blindside the markets. On the other hand, the wall of inflation is vertical and so far, completely unyielding. schedule, if required. OCR reaction: Rates set to rise from 2022 - Good Returns Based on ASB economists expectation that the OCR will peak 1.25% higher than the current levels (1.5%) in addition to assumptions about bank funding costs and inflation forecasts ASB economists expect mortgage interest rates to lift to levels around 1% to 3% higher than they are now by 2025. Welcome to the Reserve Bank of New Zealand - Te Ptea Matua. Market implementation of the OCR will continue to be the working day after the monetary policy announcement. finder.com is an independent comparison platform and information service that aims to provide you with the tools you need to make better decisions. Any commentary provided are the personal views of the author and are not necessarily representative of the views and opinions of Squirrel. Please help us keep it that way by allowing your browser to display How many advisers have left the industry? The new OCR is an increase of 50 basis points from the previous OCR of 3%. What will this mean for you? The expectations of what the Reserve Bank is going to do with the OCR influences New Zealands longer term interest rates. Published date: 16 February 2023 Last modified date: 22 February 2023 Timeline of our OCR announcements since November 1999 See our chart of OCR announcements Official Cash Rate (OCR) (updated at end of month) Chart Summary Bond traders are betting against the Reserve Bank, NZD shows notable underperformance, weaker on all the crosses, RBNZ's shock 50bps hike has back-fired; NZ rates mainly lower as market prices in eventual policy reversal, Of Interest Podcast: Profits not responsible for inflation, NZIER economist says, BNZ's Toplis: There was no need for the RBNZ to 'go like a bull at a gate', USD well supported on safe haven flows; NZD/USD fully reverses. Optional, only if you want us to follow up with you. "Normally, near-term downside growth risks are a recipe for at least caution on the part of central banks, if not outright largesse. Squirrel shall not be liable or responsible for any information, omissions, or errors present. For each of the past five increases, the Reserve Bank (RBNZ) has hiked the OCR by 50 basis points. There are fairly clearly signs that quarterly core inflation peaked a year ago and has since been falling. Market If National leads the next government, it's possible the merger of TVNZ and RNZ could be scrapped. But this time, one key thing is very, very different inflation.". Market update: With a triple OCR hike looming, what's in store for Events calendar. The RBNZ is set to deliver the announcement on Wednesday, with a mid-tier raise widely expected amongst analysts. Reserve Bank lifts official cash rate to 3.5% - 1news.co.nz Squirrel Mortgages has a Shopper Approved rating of 4.7/5 based on 1762 ratings and reviews. The official cash rate - Reserve Bank of New Zealand - Te Ptea Matua We enable economic wellbeing and prosperity for all New Zealanders. 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. Kids are at school for just 8 days this month, but there are ways of coping, as Candice Harris from Auckland University of Technology explains. 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%. 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. While we are independent, the offers that appear on this site are from companies from which finder.com receives compensation. Check your spending, adjust your budget and expenses where possible. We are New Zealand's central bank. Previous guidance, outstanding inflation challenge. But it also shows that monetary policy moves to date are getting the intended traction via the housing market. The labour market is tight as a drum.". It said commentators are on the fence over how big the jump will be but is opting for 25 basis points with the expectation the Reserve Bank will "deliver an upfront assessment reiterating that the tightening cycle is still in its early stages, that follow-up 50 basis point hikes (notably in May) are still possible and that the OCR will need to move above neutral levels to achieve the RBNZs objectives". It also published a new OCR track which projects the OCR could rise from mid-2022, with gradual rises to 1.75% in 2024. 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. Privacy Policy, Mark your calendars: Key OCR dates for 2023, sense across the market is that it wont need to get that far. which includes some flexibility to shift the date in case of If the economy slows down, the cash rate may be cut to support increased borrowing and spending and boost economic growth. Or, your browser is blocking ad display with its settings. Mark your calendars: Key OCR dates for 2023 - squirrel.co.nz "As expected, the RBNZ is still warning of all the challenges ahead and the need for continued policy support. ASB releases OCR and mortgage rate forecasts | NZ Adviser The biggest problem at the moment is the government and mismanagement the management of the border has been a joke.. Please complete the form below and click on SIGN UP to receive daily e-newsletters from. 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. Commentators only expect inflation to worsen given the Omicron outbreak and the war in Ukraine. dates for 2021 will be published at least one year in You can also search our past events. (Source: 1News). 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. The five-year term deposit rate has more than doubled, from 1% to over 2% (at the time of writing). These are the rates banks pay to raise money in the wholesale markets, which when combined with term deposits, provide the majority of funding for home loans. Steps to owning and managing Credit Suisse Group, with 24-hour and historical pricing before you buy. As mentioned above, you still might want to monitor other deals in the market to keep informed.If the rate risesIf rates rise, savings accounts rates could increase as well. Our goal is to create the best possible product, and your thoughts, ideas and suggestions play a major role in helping us identify opportunities to improve. These will be published on the Reserve Bank's ads. Reserve Bank Governor Adrian Orr has lifted the official cash rate (OCR) by 50 basis points, to 4.75 per cent, despite billions of damage the economy faces after Cyclone Gabrielle. To view our disclosure statements and other legal information, please visit our Legal Agreements page here. If you are unsure you should get independent advice before you apply for any product or commit to any plan. We may receive compensation from our partners for placement of their products or services. The key thing for borrowers is dont panic, Pope said. If youve taken the time to make sure you are in the right fund or investment to meet your goals, you shouldnt need to change your strategy. Last month Stats NZ announced that food prices rose 6.6% on last year. releasing its quarterly Monetary Policy Statements (MPS), We are now starting to see people running into problems and I predict a massive cash flow crunch is coming., Read more: Hike it like it's hot: RBNZ expected to lift rates by historic 75 bps. live-stream, If you're using Scoop for work, we ask that you or your organisation pay a small license fee with Scoop Pro. The Reserve Bank often leave it on hold, as we have seen at each meeting since March last year. The Official Cash Rate (OCR) will likely rise by 75 basis points today, one expert says. In fact, theyve been the lowest we have on our records going back to the 1960s. Both ASB and ANZ believe the OCR will begin to rise from August 2022. Like other central banks RBNZ is very likely to tighten the stance of monetary policy further. The bank continued to project the OCR to rise to about the 4 percent mark over the next year.. in principle, around two weeks later compared with the +64 (0)9 307 1629, RBNZ expected to show some leniency in next OCR announcement, The RBNZ is set to deliver the announcement on Wednesday, with a mid-tier raise. RBNZ Official Cash Rate forecast - Finder NZ MPS and OCR reviews, and at 9am for FSRs on the dates listed Reserve Bank of New Zealand (file photo). USD rebounds on all that; US Treasury yields higher led by the front end. That may have a bigger impact on the housing market than what would be desirable, the bank said. RBNZ shocks with a 50bps hike. OCR tipped to rise next month after Reserve Bank calls early - Stuff It will of course be much more than passing interest to see what it is forecasting in its next MPS to be released on August 17 - and whether it will now see a higher peak. MPS, OCR and FSR dates for 2021 | Scoop News The OCR is set by the Reserve Bank of New Zealand whose aim is to keep prices stable. We are an independent comparison platform and information service that aims to provide you with the tools you need to make better decisions. Both ASB and ANZ believe the OCR will begin to rise from August 2022.