Wednesday's third consecutive Reserve Bank 50 basis points Official Cash Rate (OCR) hike to 2.50% has now brought its first response from a bank with BNZ raising their floating rates by +45 basis points to 6.39%.
Other banks are sure to follow soon. Update: Kiwibank have raised their floating rate by +50 bps to 6.00%. ASB also raised their by +50 bps. Further Update: ANZ has raised their floating rate by +40 bps
BNZ did not change any fixed rates (although the Cooperative Bank did trim some of theirs).
BNZ also raised its Rapid Save account by +50 bps to 1.80%. Update: Kiwibank raised its Notice Saver rates by +35 bps, its online call account rate by +30 bps. ASB's Savings Plus account is up by +50 bps. ASB also raised all their TD rates.
After yesterday's OCR hike, wholesale swap rates and other bill and bond rates actually sank. Overnight, the US CPI inflation rate brought an American rate hike at the end of the month of a full +1% into play. And Canada actually pulled the trigger on a full +1% hike. Further, the IMF issued a warning to central banks to not muck about. In the context of the overnight action, yesterday's RBNZ +50 bps now looks tame - and perhaps underdone in advance of Monday's CPI data which will probably come in north of 7%.
A raft of floating rate changes will probably follow over the next few days.
Here is the running tally of bank changes to floating rates which we will update as each announcement is received.
| Floating mortgage rates | Prior rate | change | New rate | Existing customers, |
| % | bps | % | effective date | |
| RBNZ OCR | 2.00 | +50 | 2.50 | 13 July 2022 |
| ANZ | 5.94 | +40 | 6.34 | 2 August 2022 |
| ASB | 5.85 | +50 | 6.35 | 27 July 2022 |
| BNZ | 5.94 | +45 | 6.39 | 1 August 2022 |
| Kiwibank | 5.50 | +50 | 6.00 | 1 August 2022 |
| Westpac | 5.94 | +45 | 6.39 | 1 August 2022 |
| Cooperative Bank | 5.85 | +40 | 6.25 | 3 August 2022 |
| Bank of China | 4.95 | |||
| China Construction Bank | 6.50 | |||
| Heartland Bank | 4.10 | |||
| HSBC | 5.89 | |||
| ICBC | 6.00 | |||
| SBS Bank | 5.79 | |||
| TSB | 5.50 |
We will separately report the fixed rate increases when some arrive.
20 Comments
Thank you Brother Brock for yesterday's tremendous discovery from the teachings of the Prophet. "The Pendulum Swings." After further archaeological diggings I have managed to unearth more accurate wording to the manuscript. This is as the scroll reads - The Pendulum "Always" Swings. I am still trying to gather myself from this Divine Prophetic Revelation. Indeed the Pendulum is in full swing, how high in the opposite direction will it go ?
Zollner expecting CPI to come in at 7.1% next week.
https://pbs.twimg.com/media/FXk6nLlaIAAEO1D?format=png&name=small
If prices standstill in Q2 compared to Q1, CPI will come in at 5.5% (Q2 last year provides a low baseline). Now add in food and rent announced yesterday, and you are at 6%. Throw in some reasonable estimates on local Govt rates, insurance, petrol, and you are easily at 7%. What will determine how far we go past 7% will be the purchase price of housing (not the same as house prices). If I could get decent odds, I would put money on CPI starting with an 8.
Inflation still persisting. Ukraine war being dragged out. More China real estate shocks. Nz employment rates still too high. Reserve bank wont be in a hurry to see real estate value rise rapidly again. Nz economy still trucking along.
Not sure why rates would fall for quite a while. Rbnz will want to see inflation level out then fall for a while and in the meantime will want to raise the ocr to a point where the next drop will be to stop to a level way higher than 0 or 1.
Not sure anyone want to go back to 0% norms.
Few more rises this year.
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