RBNZ’s Breman backs forward guidance as OCR schedule expands

Monthly CPI, extra rate meetings to sharpen guidance

By Mina Martin

20 Feb 2026

Reserve Bank (RBNZ) Governor Anna Breman (pictured) has underlined the importance of forward-looking monetary policy as the central bank prepares to increase the number of official cash rate (OCR) decisions and respond to more frequent inflation data.

Speaking at a Business Canterbury lunch, Breman said the Reserve Bank cannot simply react to where inflation is sitting today.

“To achieve our inflation target, we need to look ahead to the future, while learning from the past and understanding the present,” she said.

“It takes time for the official cash rate to influence the economy and inflation. Therefore, we base our monetary policy decisions on a forecast of where inflation is heading, and not on where inflation is today. The inflation data is important because it helps us shape the forecast and analyse the drivers of inflation.”

Breman said the current environment, outlined in the February Monetary Policy Statement, shows why the central bank must remain focused on what comes next, even when inflation is outside its target range.

“I want to stress that we are never comfortable having inflation outside our target range. But we must accept what has already happened, understand it, and then look ahead. That’s what our Remit asks of us,” she said.

At its 18 February review, RBNZ held the OCR at 2.25%, signalling it is prepared to sit tight as 3.1% annual inflation eases back toward the 1–3% target band.

Bumpy road back to 2% inflation

Breman acknowledged that “the path to 2% inflation has been bumpy”, but signalled growing confidence that price growth is returning to target. RBNZ now expects inflation to already be back inside the 1–3% band in the first quarter of this year.“

We are confident that inflation will return to the 2% target midpoint over the next 12 months,” she said.

“That is a positive outlook for 2026. But it doesn’t mean we can put our feet up,” she cautioned, pointing to “today’s volatile world” and citing the rapid “growth in artificial intelligence” and “major shifts in geopolitical relationships” as ongoing risks.

More OCR decisions as CPI goes monthly

From 2027, RBNZ will lift the number of scheduled monetary policy decisions from seven to eight per year to align with a move to monthly Consumers Price Index (CPI) releases. The previously announced February 2027 decision has been brought forward by one week to fit the new timetable.

While OCR decision dates have been published through to February 2028, the central bank stressed that the Monetary Policy Committee can still act between meetings “should financial or economic conditions warrant it”.

Breman also reiterated that being “forward-focused does not imply that monetary policy is on a pre-set course”, and said the committee “will adjust our plans as we get new information, and always with a focus on the future.”

RBNZ’s Financial Stability Report will continue to be released twice a year, in May and November.