Buying guide

When is the next OCR announcement in NZ?

The Official Cash Rate can affect your interest rates so it’s always good to know when it may change.

Last updated: 18 January 2024

When the Official Cash Rate (OCR) changes mortgage interest rates generally change too. That’s not all it affects though – the OCR can influence the price of everyday items, the housing market, the job market and much more. Needless to say, it's a fairly important number.

That’s why it’s always good to know what the OCR is, how it works and when the next OCR announcement will be.

The date of the next OCR announcement

The OCR is reviewed seven times a year then an announcement is made detailing the decision and the reasons behind it. In 2024 the OCR announcements will happen on:

28 February.
10 April.
01 May.
10 July.
14 August.
09 October.
27 November

Keep in mind that just because there is an announcement, doesn’t mean that the OCR will increase or decrease. For example, in 2023, the OCR stayed the same all year after increasing in May.

What is the OCR?

The Official Cash Rate (OCR) is a tool used by the Reserve Bank’s Monetary Policy Committee to keep price inflation within 1-3%. It’s essentially an interest rate that affects the cost of operating for retail banks like ANZ and Westpac. The idea is that when the OCR increases, retail interest rates increase, mortgage and debt holders pay more, and the economy slows down, and when the OCR decreases, the opposite happens.

The cash rate works because, when those with debt have to pay more to service their debt, they have less money left to spend on other goods and services. When demand for goods and services decreases their prices should decrease too (in theory).

The Reserve Bank is a government owned entity that sets interest rates.

What is the OCR forecast for 2024?

Economists and forecasters generally agree that the OCR is either at, or nearing, its peak at 5.5%. Some expect that rate cuts will come by mid 2024:

BNZ’s economists have forecasted that it will drop to 4.75% by mid 2024 then 4% next summer.
Kiwibank expects rate cuts to begin in May 2024 with the OCR dropping to 3% by 2026.

Other economists are more hawkish, forecasting that the OCR will need to be increased in early 2024 then stay the same for an extended period:

Sharon Zolner Chief Economist at ANZ expects a rate hike in February before the rate is cut to 5% where it will stay until at least 2025.
Kelly Eckhold Chief Economist at Westpac has forecasted a rate hike in February and no rate cuts until 2025.

As you can see, the experts can’t agree on exactly where the OCR is headed, so, unfortunately, it’s impossible to know what will happen with any certainty. What we do know is that the Reserve Bank will need to keep the OCR high until they are confident that inflation is under control – when that might be is anybody’s guess.

*We hope this article has provided some helpful information. It's based on our experience and is not intended as a complete guide or as financial advice. Of course, it doesn’t consider your individual needs or situation. If you’re considering buying home insurance, make sure to do your due diligence, and speak with a professional if necessary.

Author

Ben Tutty

Ben Tutty is a regular contributor for Trade Me and he's also contributed to Stuff and the Informed Investor. He's got 10+ years experience as both a journalist and website copywriter, specialising in real estate, finance and tourism. Ben lives in Wānaka with his partner and his best mate (Finnegan the whippet).