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Monetary Policy Statement November 2023

The Monetary Policy Committee agreed to maintain the Official Cash Rate (OCR) at 5.5%.

Reserve Bank of New Zealand

Monetary Policy Statement November 2023
Monetary Policy Statement November 2023

The Monetary Policy Committee agreed to maintain the Official Cash Rate (OCR) at 5.5%.

Our monetary policy decision documents

We have a range of resources about the OCR and our recent monetary policy decision for different audiences.

Read our media release and record of meeting

Monetary policy to remain restrictive

A summary of the Monetary Policy Committee's decision from the meeting on 29 November 2023 (15 minutes to read). 

Monetary policy snapshots

Demand is declining, but economic activity remains elevated.

Resources have been freed up in the economy.

High levels of immigration and ongoing government investment are supporting economic activity.

Maintaining high interest rates will help to achieve our inflation and employment objectives.

Chief Economist Paul Conway talks about the November Monetary Policy Statement

Kia ora, I’m Paul Conway, Chief Economist at Te Pūtea Matua, The Reserve Bank of New Zealand. Earlier this week, the Monetary Policy Committee released it’s Movember Monetary Policy Statement and decided to keep the Official Cash Rate (OCR) on hold at 5.50%, and signalled that interest rates will likely need to stay at restrictive levels throughout 2024.

Interest rates are restricting spending in the economy. And on the supply side high migration is adding to population growth and reducing pressures in the labour market.

Bottlenecks in global supply chains have eased considerably and global shipping costs have fallen back to pre-pandemic levels.

Easing demand and increasing supply have lowered inflation in New Zealand, so annual consumer price inflation has eased to 5.6% in the September quarter of this year. However, falls in headline inflation have been led by falls in imported inflation, inflation coming over the border, especially for food and petrol. Whereas domestically generated inflation, home grown inflation, if you like, is falling much more slowly.

While declining inflation is also still well above our target range of 1 to 3%, and there are risks of increased inflationary pressures going forward, so strong population growth is adding to demand in the economy. Government investment may be higher given the rebuild after the cyclone and floods earlier this year and the need to improve resilience more generally.

We currently watch and worry about inflation, but we are also willing to lift the OCR if demand in the economy turns out to be stronger than we currently expect.

While the job of tackling high inflation isn't done yet, we are making good progress.

We will get inflation back in the box, that is back in the 1 to 3% target range.

Kia ora, thank you.