New Zealand central bank raises rates by 25 bps to 2.75%

The Reserve Bank of New Zealand raised its official cash rate by 25 basis points to 2.75 percent on Wednesday, September 2, 2026, signaling that further gradual tightening is likely as it seeks to return inflation to its target midpoint. The widely anticipated move, which follows a similar increase in July, marks the second consecutive rate hike as the central bank responds to persistent inflationary pressures. In its accompanying statement, the Monetary Policy Committee said the decision reduces the risk that the cash rate needs to increase by more later. It emphasized that future policy moves will be gradual and depend on the balance of risks to medium-term inflation. The committee noted that while inflation has likely peaked, it remains above the target band, with headline annual inflation at 4.1 percent in the June quarter. Excluding vehicle fuels, however, annual inflation decreased to 2.9 percent, and most measures of core inflation are within the 1 to 3 percent target band.