The Reserve Bank of New Zealand left its policy rate at 2.75% against forecasts for a hike, and the New Zealand dollar fell sharply against the Australian dollar.
Optencis Newsroom28 Oct 20262 min read
The Reserve Bank of New Zealand (RBNZ) unexpectedly kept its Official Cash Rate at 2.75% on 28 October 2026, when economists had forecast a rise to 3.00%. The New Zealand dollar, often called the kiwi, tumbled after the decision and recorded its biggest slide against the Australian dollar since 2017, according to Bloomberg.
What happened
The RBNZ announced its rate decision and rate statement at 01:00 UTC on 28 October 2026. Instead of raising its Official Cash Rate, the main interest rate it sets, the central bank left it on hold. Bloomberg reported that the decision defied economists' forecasts for an interest-rate hike.
The figures
The Official Cash Rate stayed at 2.75%, the same level as before the meeting. The economic calendar consensus had pointed to an increase of 0.25 percentage point, to 3.00%. Within less than an hour of the announcement, the New Zealand dollar had fallen the most against the Australian dollar since 2017, Bloomberg said.
Why it matters
Interest rates are one of the main drivers of currency values. When traders expect a central bank to raise rates, that expectation is often already built into the currency's price. A hold in place of an expected hike removes that support, which helps explain why the kiwi reacted so strongly. The move against the Australian dollar stands out because the two currencies usually move closely together, given the close links between the two economies.
Markets will study the RBNZ rate statement for the reasons behind the hold and any guidance on future decisions. Traders will also watch whether the surprise changes expectations for the path of New Zealand interest rates in the months ahead. We will update our coverage as more details emerge.
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