Breman discusses inflation, global headwinds in Waikato
Reserve Bank of New Zealand Governor Dr. Breman engaged the Waikato community on the economic outlook, discussing global trends, inflation, and the RBNZ's monetary policy stance. She noted annual CPI inflation reached 3.1 percent in March 2026.
Global forces, local impact
Dr. Breman highlighted that the current global environment, particularly the Middle East conflict, continues to present economic headwinds.
These disruptions have impacted global supply chains, leading to increased prices for oil and fertilisers.
As a small open economy, New Zealand is inevitably affected by these global forces, with varying impacts across sectors, regions, and households.
She emphasized that monetary policy's role is to prevent temporary inflation from becoming enduring, by ensuring aggregate inflation returns to 2 percent over the medium term.
Annual CPI inflation reached 3.1 percent in the March 2026 quarter, exceeding the RBNZ's 1 to 3 percent target range.
This figure was slightly higher than anticipated, largely driven by fuel prices, though core inflation measures remained stable within the target band.
Balancing inflation and recovery
The Monetary Policy Committee (MPC) decided on April 8 to hold the Official Cash Rate (OCR) at 2.25 percent.
This decision balanced the potential benefits of pre-emptively addressing the risk of higher medium-term inflation against the cost of unnecessarily stifling economic recovery.
Dr. Breman affirmed the Reserve Bank of New Zealand's readiness to act decisively if short-term inflation pressures become persistent, ensuring inflation settles sustainably at 2 percent.
The MPC continues to monitor Middle East developments and incoming data.
This Waikato engagement is part of the RBNZ's regional program, connecting leaders with communities to understand local impacts and gather firsthand perspectives.