The Reserve Bank of New Zealand (RBNZ) decided to keep its Official Cash Rate (OCR) unchanged at 2.25% during its April monetary policy meeting, a move that was widely anticipated by market participants due to ongoing uncertainties in the economic and inflation outlook stemming from the Iran war and recent volatility in oil prices [1][2]. This marks the second consecutive meeting where the RBNZ has left rates steady [1]. The decision had a muted immediate impact on the New Zealand Dollar (NZD), with traders awaiting further guidance from RBNZ Governor Dr. Anna Breman's post-meeting press conference scheduled for later in the day [1][2].
Following the announcement, the NZD/USD pair extended its gains for the third consecutive day, reaching a near two-week high above the 0.5800 mark, supported by positive geopolitical developments, specifically the US-Iran ceasefire [1]. US President Donald Trump announced a two-week suspension of planned military strikes against Iran, contingent on Tehran allowing safe passage through the Strait of Hormuz, which Iran's Foreign Minister Seyed Abbas Araghchi confirmed would be possible for two weeks if attacks ceased [1]. This development led to a sharp decline in crude oil prices and eased inflationary concerns, which in turn tempered market expectations for a US Federal Reserve rate hike and weighed on the US Dollar [1].
In the cross-currency market, AUD/NZD edged lower toward 1.2150, halting its winning streak that began on March 30, as the NZD found support from the RBNZ's steady policy stance [2]. The Australian Dollar (AUD) also benefited from improved global risk sentiment following the ceasefire announcement, but the easing of energy price pressures may reduce the likelihood of further tightening by the Reserve Bank of Australia (RBA), which markets had previously priced in at a rate hike toward 4.35% for May [2].
Both sources highlight the importance of the upcoming RBNZ press conference for additional insights into the central bank's policy outlook, with potential implications for short-term NZD volatility [1][2]. Notably, there is a discrepancy regarding the RBNZ Governor: Source [1] refers to Dr. Anna Breman, while Source [2] mentions interim Governor Christian Hawkesby.
CONCLUSION
The RBNZ's decision to keep rates unchanged at 2.25% was in line with expectations and provided moderate support to the NZD, especially amid easing geopolitical tensions and lower oil prices. Market participants are now focused on the RBNZ Governor's press conference for further policy guidance, while the US-Iran ceasefire has alleviated inflation concerns and influenced both NZD and AUD cross rates.