MNI RBNZ Review-Apr 2026: Hike Discussed, No Strong Argument

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EXECUTIVE SUMMARY: 

• In a unanimous decision, the RBNZ kept rates at 2.25% but warned that it is prepared to hike if inflation is not expected to return to the 2% band mid-point over the medium term. If core and wage inflation as well as inflation expectations aren’t contained “decisive and timely increases in the OCR would be required”. 
• The MPC discussed whether to hike rates to pre-emptively act against rising inflation but the discussion was balanced looking at the risks to the already soft recovery from higher fuel prices.
• It seems likely that the next RBNZ move will be a rate hike but the timing will depend on core & wage inflation and inflation expectations.
• RBNZ-dated OIS pricing is now 4-20bps firmer than yesterday’s pre-RBNZ levels. 9bps tightening is priced for May, while February 2027 assigns 91bps.