According to Odaily, the Reserve Bank of New Zealand (RBNZ) is set to make a crucial decision this week, with economists and investors uncertain whether the bank will initiate a rate cut or wait for further evidence of inflation returning to target levels. Out of 21 economists surveyed, 12 expect the RBNZ to keep the interest rate steady at 5.5%, while 9 predict the beginning of a rate-cutting cycle.

Nick Tuffley, Chief Economist at ASB Bank in Auckland, stated that the risk of overly tight monetary policy has become a reality, suggesting that the time for a rate cut has arrived. However, this largely depends on how much the RBNZ's forecasts have changed. Within less than two years, New Zealand's economy may show signs of a third recession, with inflation slowing more than the central bank anticipated. Despite this, some domestic prices remain high, and initiating a rate cut now would be a significant shift from the signal the central bank sent just three months ago, which indicated a rate cut was at least a year away.