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RBNZ cuts OCR to 2.25% as easing cycle extends into 2026

RBNZ cuts OCR to 2.25% to support a fragile recovery. Officials say disinflation is underway and policy will stay data‑dependent.

TL;DR

RBNZ cuts OCR to 2.25% with a 5–1 monetary policy committee vote. New Zealand inflation 3% is at the top of the 1–3% band, with projections near 2% by mid‑2026. However, future moves hinge on the data.

RBNZ cuts OCR to 2.25%

RBNZ cuts OCR to 2.25% in the RBNZ November 2025 decision, a RBNZ rate cut 25 bps that takes the official cash rate 2.25% to an over three‑year low, according to Reuters. RBNZ said, “The Committee voted to reduce the OCR by 25 basis points to 2.25 percent.” Consequently, the monetary policy committee vote delivered a 5–1 split.

How the MPC voted: 5–1 split

Official records confirm a 5–1 monetary policy committee vote for a cut. However, one member preferred to hold, as reported by RNZ and Reuters.

Timeline to the RBNZ cuts OCR to 2.25%

The move extends an easing cycle that began in August 2024. Reuters noted the rate is at its lowest since mid‑2022. Before the meeting, NZIER’s Shadow Board recommended a further 25 bp reduction to 2.25%, aligning with another RBNZ rate cut 25 bps in the RBNZ November 2025 decision.

Rationale: inflation at 3%, disinflation ahead

New Zealand inflation 3% in the September quarter sits at the top of the target band. Moreover, RBNZ expects inflation to fall toward about 2% by mid‑2026: “…expected to fall to around 2 percent by mid‑2026.” Additionally, officials cite spare capacity and a gradual recovery as reasons to ease.

RBNZ cuts OCR to 2.25%: what it means for households and jobs

Transmission is underway. RBNZ noted, “Lower interest rates are encouraging household spending.” Additionally, “The labour market remains weak, but there are signs that it is stabilising.” For borrowers, the official cash rate 2.25% should lower servicing costs as repricing flows through, although timing will vary by lender and product.

Forward guidance: data‑dependent path for the OCR

Guidance remains cautious. RBNZ emphasised, “Future moves in the OCR will depend on how the outlook for medium‑term inflation and the economy evolve.” Therefore, the committee is keeping options open rather than pre‑committing to further easing, despite the supportive monetary policy committee vote.

What’s Next: data and decision watch

Markets will watch CPI, wages, and employment prints into early 2026. Progress toward ~2% inflation will shape any change in stance. Since New Zealand inflation 3% only just returned to target, the official cash rate 2.25% may remain steady if momentum holds.