2026.10.1502:58:41UTC+00RBNZ Signals Flexibility Amid Inflation Pressures

Reserve Bank of New Zealand Chief Economist Paul Conway said Thursday that the late-October interest rate decision remains “completely open,” despite ongoing inflation pressures. Speaking at IMF and World Bank meetings in Bangkok, he emphasized the need for flexibility: “We want the option of either holding steady or raising rates by 25 basis points, and I believe we currently have that option.”

Conway reiterated that an increase in the official cash rate (OCR) is still considered “most likely,” although the timing has not yet been determined. He pointed out that the recent decline in oil prices and in the New Zealand dollar has created additional short-term upward pressure on inflation, complicating the near-term outlook. Nevertheless, the RBNZ continues to expect inflation to return to its 1–3% target range next year, even if current conditions remain challenging in the short term.