28.05.202602:07:21UTC+00New Zealand Dollar Near 2-Week High

The New Zealand dollar hovered near a two-week high around $0.589 on Thursday, after RBNZ Governor Anna Breman signaled that the cash rate may need to rise further amid mounting inflationary pressures. Her comments reinforced the central bank’s hawkish stance, following its decision the previous day to leave interest rates unchanged. Updated projections from the RBNZ now imply at least two 25-basis-point rate hikes before the end of the year.

Higher oil prices have pushed up the inflation outlook, with price growth now expected to peak at 4.3% in the third quarter—well above the RBNZ’s 1–3% target band. At the same time, the central bank downgraded its economic growth forecasts.

Breman stressed that policymakers are closely watching how weaker demand—pressured by rising costs and persistent inflation—is helping to alleviate broader price pressures across the economy, a key consideration for the future interest rate path. She also reiterated that the RBNZ remains firmly committed to returning inflation to target.