If this figure is reasonable, you might want to consider comparing variable mortgages.If the rate holdsBecause your rate is fixed for an agreed period, a decision by the RBNZ to hold wont have as much of an effect on you depending on how long you still have to go in your fixed term. Reserve Bank Governor Adrian Orr has lifted the official cash rate (OCR) by 50 basis points, to 4.75 per cent, despite billions of damage the economy faces after Cyclone Gabrielle. Economists at ASB see the change in wording, and new OCR track, as signs the central bank is moving further away from another potential rate cut, and towards future rate rises. Have a chat to one of our advisers. The 2021 The OCR has been steadily increasing since October last year in an ongoing bid to tackle inflation of 7.3%. advance. And why did the Reserve Bank lift it today? When the RBNZ gets closer to actually changing the OCR setting, the upward pressure will come on the shorter terms and floating rates too.. He Tipu Ka Hua Fund Opens To Advance Mori-led Research, Counting Carbon - NZ Contributes To Global C02 Stocktake. in principle, around two weeks later compared with the How strong they will be depends on the RBNZ's assessment on inflation developments, so we might see a slowing down in the magnitude of the increases, but increases are still on the agenda. John Bolton (pictured above left), founder of Squirrel Mortgages, said in his view a 75bps increase was too much. We expect inflation will be much higher over the next five years than it has been over the past five years. Ask your lender for a rate discount so that if rates do rise you wont be worse off, or alternatively, compare other variable or even fixed-rate mortgages to find a better deal. We may also receive compensation if you click on certain links posted on our site. Reserve Bank lifts Official Cash Rate 50 basis points to 5.25% saying severe weather events have led to higher prices for some goods & services, US JOLTS labour market report shows much weaker demand for labour - US Treasury yields down 6-12bps, equities weaker, USD weaker. At best, it has plateaued around 7.2% which leaves a substantial gap to the current OCR. "As expected, the RBNZ is still warning of all the challenges ahead and the need for continued policy support. Borrowers will be pleased to know we still expect mortgage interest rates to eventually settle over the next decade at levels well below the long-run averages of the past 20 years. finder.com is an independent comparison platform and information service that aims to provide you with the tools you need to make better decisions. Our daily newsletter is FREE and keeps you up to date with the world of mortgage. The RBNZ today opted to maintain monetary policy settings and keep the official cash rate at 0.25%. Reserve Bank of New Zealand (file photo). Market update: With a triple OCR hike looming, what's in store for Indeed, there could well be a slowly building trend for more borrowers to fix for longer periods in the coming months, to provide a hedge against rising rates.". Banks website at least one year in Squirrel Legal documents & Policies The release dates for Kiwi homeowners should brace for yet another increase to the cash rate, according to this months Finder RBNZ Official Cash Rate Survey. The RBNZ needs to be mindful of how quickly they went up as we navigate the impact of existing changes still washing through, Bolton said. OCR: Reserve Bank leaves interest rate on hold - NZ Herald The opinions expressed in this article should not be taken as financial advice, or a recommendation of any financial product. ANZ is forecasting it could reach 7.4 percent in the second quarter of the year. Because your rate is fixed for an agreed period, a decision by the RBNZ to hold wont have as much of an effect on you depending on how long you still have to go in your fixed term. Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search. See what promotions banks are offering. ASB, ANZ, and BNZ also released their forecasts - expecting the OCR to reach 0.5% next month, according to Stuff.. ASB chief economist Nick Tuffley said the RBNZ had "clearly changed tack . This As mentioned above, you still might want to monitor other deals in the market to keep informed.If the rate risesIf rates rise, savings accounts rates could increase as well. Report 5 May - FSR Media conference & Official Cash Rate announcements 24 February Central bank will make OCR announcement this week. If that continues to be the case, the higher expected returns of managed funds and other investments will continue to be more attractive to savers. So, what is the OCR? The expectations of what the Reserve Bank is going to do with the OCR influences New Zealands longer term interest rates. A timeline of our past monetary policy and Official Cash Rate (OCR) announcements. Squirrel shall not be liable or responsible for any information, omissions, or errors present. arises with other important releases or events. OCR announcement dates for 2023 After a period of much-needed respite over the holiday break, the RBNZ will be back to its regularly scheduled programming from late February. Term deposit rates have started to increase, at last. See more of ASBs latest financial news and announcements here on our blog. Bond traders are betting against the Reserve Bank, NZD shows notable underperformance, weaker on all the crosses, RBNZ's shock 50bps hike has back-fired; NZ rates mainly lower as market prices in eventual policy reversal, Of Interest Podcast: Profits not responsible for inflation, NZIER economist says, BNZ's Toplis: There was no need for the RBNZ to 'go like a bull at a gate', USD well supported on safe haven flows; NZD/USD fully reverses. Statistics New Zealand says the cost of living for households rose 7.7% in the year to March 2023, boosted by higher rents and interest payments and increased grocery food, fruit and vegetables prices, New Reserve Bank mortgage figures show homeowners paid close to $4 billion in interest during the March quarter, while total scheduled repayments topped $6 billion for the first time since the RBNZ started publishing this data, Softer than expected German CPI, GDP and Euro area GDP data drive German Bunds down 14-15bps. Announcements will be made as usual at 2pm for With earnings season in full swing, it might be easy to forget the Reserve Bank is also scheduled to make the first official cash rate (OCR) announcement of the new year this week. With earnings season in full swing, it might be easy to forget the Reserve Bankis also scheduled to make the first official cash rate (OCR) announcement of the new year this week. The projection is conditional and could change with economic circumstances. Reserve Bank lifts official cash rate to 3.5% - 1news.co.nz Meanwhile, ASB is forecasting a more cautious 25 basis point jump, but isn't ruling out the possibility of a larger increase. In fact, theyve been the lowest we have on our records going back to the 1960s. If youve taken the time to make sure you are in the right fund or investment to meet your goals, you shouldnt need to change your strategy. Quarterly Monetary Policy Statements (in bold) are more in-depth - and may be where the RBNZ revises its forecasts. Last month Stats NZ announced that food prices rose 6.6% on last year. It comes as unemployment, forecast to drop from 4.7 percent to 4.4 percent . Published date: 16 February 2023 Last modified date: 22 February 2023 Timeline of our OCR announcements since November 1999 See our chart of OCR announcements Official Cash Rate (OCR) (updated at end of month) Chart Summary This supported US Treasuries, with US 10-year rate down 10bps to 3.42%. Join Scoop Pro And borrowers can lock in incredibly low long-term interest rates (around 3% to 3.7%) now if interest rate certainty over a longer period is of the utmost importance, the ASB economists wrote on the report. Credits: Video - Newshub; Image- Getty Images. Based on ASB economists expectation that the OCR will peak 1.25% higher than the current levels (1.5%) in addition to assumptions about bank funding costs and inflation forecasts ASB economists expect mortgage interest rates to lift to levels around 1% to 3% higher than they are now by 2025. Media conferences will be held following the If you are unsure you should get independent advice before you apply for any product or commit to any plan. A lot can change, however, and a more strident path of OCR hikes in 2022 and then OCR cuts in 2023/24 is a distinct possibility.". If the economy overheats and inflation rises to an unacceptable level, the RBNZ may increase the cash rate to discourage excessive borrowing and tackle rising inflation. OCR currently at 4.75% Next RBNZ OCR announcement: 05 April 2023 We asked our panel of experts to have their say on New Zealand's property market, the possible extension of the travel bubble, and more. change helps the Reserve Bank fully incorporate the most The growth assets like property and shares are influenced by the broad economic backdrop and that includes interest rates. However, this doesnt mean you have to do anything with your investment. OCR decision: Reserve Bank raises official cash rate by 50 - Newshub If your fixed-rate mortgage is to end soon, start comparing what deals are on offer, so you dont find yourself scrambling to lock in another rate. Our daily newsletter is FREE and keeps you up to date with the world of mortgage. Inflation is now back above 3%, and we expect it to press higher over late 2021/early 2022. "As in February, its likely to be a tough call between a 25bp and a 50bp hike. live-stream, If you're using Scoop for work, we ask that you or your organisation pay a small license fee with Scoop Pro. Get two weeks free access to NBRs Premium Online Subscription, which includes full access to all of NBRs great content on any device. It's the eighth consecutive time the Reserve Bank opted for a rates rise, and sixth increase in 2022 alone - February, April, May, July and August saw similar action. We are now starting to see people running into problems and I predict a massive cash flow crunch is coming., Read more: Hike it like it's hot: RBNZ expected to lift rates by historic 75 bps. On Wednesday, the RBNZ raised the official cash rate (OCR) by 50 basis points to 2.5 percent. By the Nov-MPS, we expect the economy to be in recession, with the UR at 4.5% and CPI at 5.6%, and the risk of undershooting the inflation target as justification to start easing with a 50bps cut. I then expect the RBNZ to be in a position to ease policy as early as November this year. The inflation and employment data have turned slightly, but not to an emphatic degree, yet. The economy also experienced more than expected consumer spending during summer holidays. For a few months back in 2020, economists were warning the OCR could go to the unprecedented rate of zero. MPS/OCR Reserve Bank bumps OCR up to 4.75pc despite Cyclone Gabrielle's Just when we thought the 'shock' had gone out of Orr RBNZ lifts the OCR to 5.25% in surprise move to combat cyclone inflation. "This should help mitigate immediate financial market reaction from 'just' a 25bp move and largely sustain the tightening in financial conditions that the RBNZ has already engineered. It's a big day for economic news as the Reserve Bank (RBNZ) gets set to announce the official cash rate (OCR) and Treasury opens the government's books, releasing the Crown accounts for the. Subscribe to our newsletter to ensure you're the first to get the latest articles and insights from the Squirrel team. August, and November. OCR - Usually While the election campaign might be a close run race, dont expect it to be packed full of transformative policies and big dreams for the future of the nation, Kiwi households still being hit hard by food and mortgage interest rate costs, The country's mortgage interest bill is continuing to hit high spots, BNZ sees signs of the economy rebalancing, Tim Hazledine on potential new tools to help with the inflation fight, NZ rates and NZD fall after big downside miss to NZ CPI, Seven's not heaven: Our enduring inflation woes. National's finance spokesperson Nicola Willis said the government's . If the RBNZ goes aggressive on Wednesday, they are just increasingly the likelihood of a hard landing. If this happens, you might want to compare the rates of high-interest savings accounts. The latest quarterly inflation stats last month didn't exactly deliver the news the market (or anyone to be honest) was hoping for - with inflation tracking at 7.2%, as opposed to the 6.5% that was anticipated. Kiwi homeowners are in for little relief with yet another rate hike expected this month, according to this months Finder RBNZ Official Cash Rate Survey. San Francisco-based First Republic is the third midsize bank to fail in two months. And firms' pricing intentions, which have been the best inflation indicator of all, are stratospheric and at this point, still rising.". We enable economic wellbeing and prosperity for all New Zealanders. The RBNZ's next OCR announcement, and the last one for the year, is coming up on the 23 rd November. If your fixed-rate mortgage is to end soon, start comparing what deals are on offer, so you dont find yourself scrambling to lock in another rate.If the rate gets cutIf you feel your mortgage is no longer competitive, you might want to obtain a quote from your lender to find out possible exit costs.