RBNZ Holds the OCR at 2.75% in a Surprise 4-3 Vote and the New Zealand Dollar Falls 1.2%
The Reserve Bank of New Zealand held its cash rate on October 28, 2026, when markets expected a third hike. NZD/USD fell 1.21% in a minute, and the bank said tighter policy is still likely.
- The Reserve Bank of New Zealand held the OCR at 2.75% on October 28, 2026, in a 4-3 vote; markets had priced about a 90% chance of a hike.
- NZD/USD fell from 0.56745 to 0.56057, down 1.21%, in the minute after the decision.
- All members said tighter policy is likely to be needed, and the bank expects inflation of 4.4% in the December quarter.
Reaction by asset (real prices)
| Asset | 2m before | At release | +1m | +10m | +1m % | +10m % |
|---|---|---|---|---|---|---|
| NZDUSD | 0.57 | 0.57 | 0.56 | 0.56 | -1.21% | -1.33% |
The Reserve Bank of New Zealand kept its official cash rate (OCR) at 2.75% on Wednesday, October 28, 2026, in a 4-3 vote, when markets had priced roughly a 90% chance of a rise to 3%. The decision reached the MoveSurge news feed at 21:00:22 ET on October 27, which was 2:00 p.m. in Wellington, with the New Zealand dollar at 0.56745 US dollars. A minute later it was at 0.56057, down 1.21%, and fifteen minutes after the headline it was at 0.55939, down 1.42%. Later on Wednesday it was at 0.5609, still 1.34% lower on the day, according to Yahoo Finance.
Why the hold surprised markets
The bank had raised the OCR in July, to 2.50%, and again in September, to 2.75%, and a third rise was widely expected. A Reuters poll found 22 of 27 economists forecasting a hike, Babypips reported. Governor Anna Breman, Carl Hansen, Prasanna Gai and Rebecca Williams voted to hold. Hayley Gourley, Paul Conway and Karen Silk voted for a rise of 25 basis points (a basis point is 0.01 percentage point). The majority wanted more time to see what the two earlier increases were doing to the economy.
The vote came 10 days before New Zealand's general election on November 7.
| Meeting | Decision | OCR after |
|---|---|---|
| July 2026 | Raised | 2.50% |
| September 2, 2026 | Raised 25 basis points | 2.75% |
| October 28, 2026 | Held, 4-3 vote | 2.75% |
A hold that still points to higher rates
All seven members agreed that tighter policy was likely to be needed, depending on how the economy develops, according to the statement. The bank expects annual inflation to rise to 4.4% in the December quarter, mostly because fuel futures prices have climbed with the disruption to global energy markets. The record of the meeting also notes the fall in the New Zealand dollar, which raises the price of imports and could add to inflation if it lasts.
At her news conference Breman said more increases were likely at coming meetings and that rates could go into restrictive territory, the level at which they slow the economy, investingLive reported. The currency barely recovered on those comments. Three of the seven members already voted for a rise, and the next decision is due in December.
Did the RBNZ raise rates in October 2026?
No. The Reserve Bank of New Zealand held the official cash rate at 2.75% on October 28, 2026, in a 4-3 vote. Three members wanted a rise to 3%.
Why did the New Zealand dollar fall?
Markets had priced about a 90% chance of a hike, so the hold surprised traders. NZD/USD fell from 0.56745 to 0.56057, or 1.21%, in the minute after the decision.
Will the RBNZ raise rates in December?
All members said tighter policy is likely to be needed, depending on the economy, and Governor Breman said further increases were likely at coming meetings. The bank expects inflation to rise to 4.4% in the December quarter.
How did the RBNZ committee vote?
Anna Breman, Carl Hansen, Prasanna Gai and Rebecca Williams voted to hold at 2.75%. Hayley Gourley, Paul Conway and Karen Silk voted for an increase of 25 basis points.
Sources
-
OCR held at 2.75% (Reserve Bank of New Zealand media release)
— Reserve Bank of New Zealand via Scoop
The decision, the 4-3 vote and how each member voted, the agreement that tighter policy is likely, the 4.4% December-quarter inflation forecast and the fuel-price driver.
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Reserve Bank stuns by holding OCR at 2.75% following a 4-3 vote
— interest.co.nz
Independent report of the hold and the roughly 90% market pricing of a hike.
-
RBNZ Rate Shocker: Breaking Down the Surprise Hold Decision
— Babypips
The Reuters poll of 22 of 27 economists expecting a hike and the November 7 election date.
-
RBNZ's Breman: more hikes likely at coming meetings, possibly into restrictive territory
— investingLive
Breman's comments on further increases and restrictive policy.
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