According to a report by Credit Agricole, the Reserve Bank of New Zealand (RBNZ) is expected to raise its official cash rate (OCR) by 25 basis points to 5.50% on Wednesday. The RBNZ was the first G10 central bank to begin hiking rates this global cycle and is among the most aggressive, with its OCR currently level with the Federal Open Market Committee's Federal Funds rate, making it the highest in the G10.

The bank notes several victories for the RBNZ in its fight against inflation, including inflation declining faster than expected and 2-year-ahead inflation expectations of corporate price setters decreasing from 3.30% to 2.79%, entering the central bank's targeting band for the first time since Q4 2021.

Credit Agricole expects the RBNZ to raise its forecast peak in the OCR from 5.50% in February to 6.00%, and this is being priced in by the market at about a 50% chance. The market is much more confident that the RBNZ will forecast a peak OCR of 5.75%. The bank predicts that such a forecast by the RBNZ would bolster the New Zealand Dollar (NZD).