MNI RBNZ Preview-May 2026: May Hold, Watch OCR Path

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EXECUTIVE SUMMARY: 

• The RBNZ decision is announced Wednesday 27 May and it is likely to keep rates stable at 2.25% but a hike will probably be part of the discussion. The decision may not be unanimous and for the first time any dissenters will be named. Bloomberg consensus is unanimous in expecting a hold this month. 
• Updated staff forecasts will be included with the decision and the OCR profile could signal around when a tightening cycle may begin.
• Significant spare capacity is likely to drive the MPC to maintain accommodative policy for as long as possible. There is a risk in removing accommodation when the economy remains weak but there is also a risk in delaying tightening if it is needed to contain inflation – if the RBNZ waits too long it may need to hike more than if it makes a preemptive move.
• OIS pricing implies a 16% probability of a 25bp hike in May, down sharply from around 66% in late April. Potentially more notable is pricing for the July meeting, where the market currently assigns a 68% probability of a 25bp hike, compared with more than fully priced in late April.