MNI RBNZ Review-Feb 2026: On Hold, Hike Possible Before Yr End

EXECUTIVE SUMMARY: 

• The RBNZ left rates on hold, as widely expected. The accompanying statement and updated forecast profile, particularly in terms of the OCR track, were not as hawkish as market pricing. Notably the RBNZ projection for the Q4 OCR (average) is 2.38% against a pre market pricing outcome of around 2.64% (for year end) per OIS markets.
• RBNZ Governor Breman stated that with excess capacity, economic growth can be stronger in the near term without generating inflation pressures. She said that policy can stay accommodative before gradually tightening. A hike won't be delivered until the central bank sees stronger growth and firmer core inflation pressures.
• The market has 29bps of tightening priced by year-end versus 39bps prior to yesterday’s decision. Notably, market pricing remains 12-22bps firmer than levels seen prior to November’s RBNZ decision.

FOR THE FULL PUBLICATION PLEASE USE THE FOLLOWING LINK:RBNZ Review - Feb 2026.pdf