With the latest economic data coming in weaker than it had anticipated, the RBNZ will likely opt for a smaller 25bp hike to the official cash rate (OCR) at its upcoming meeting on April 5th. We expect only one more 25bp rate hike after that, with the OCR peaking at 5.25% in May. As a protracted downturn creates deflationary pressures, we think the RBNZ will pivot to rate cuts by year-end.
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