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Reserve Bank of New Zealand (RBNZ) Governor Christian Hawkesby said that the deterioration in the country’s labour market was within the bank’s expectations, Reuters reported on Thursday. The remarks came after data this week showed New Zealand’s Unemployment Rate in the third quarter (Q3) rose to the highest level since 2016. “It is hard out there, that is something that we had anticipated in terms of where we’re in the economic cycle,” said Hawkesby. Market reaction   As of writing, the NZD/USD pair is up 0.27% on the day at 0.5665. RBNZ FAQs The Reserve Bank of New Zealand (RBNZ) is the country’s central bank. Its economic objectives are achieving and maintaining price stability – achieved when inflation, measured by the Consumer Price Index (CPI), falls within the band of between 1% and 3% – and supporting maximum sustainable employment. The Reserve Bank of New Zealand’s (RBNZ) Monetary Policy Committee (MPC) decides the appropriate level of the Official Cash Rate (OCR) according to its objectives. When inflation is above target, the bank will attempt to tame it by raising its key OCR, making it more expensive for households and businesses to borrow money and thus cooling the economy. Higher interest rates are generally positive for the New Zealand Dollar (NZD) as they lead to higher yields, making the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken NZD. Employment is important for the Reserve Bank of New Zealand (RBNZ) because a tight labor market can fuel inflation. The RBNZ’s goal of “maximum sustainable employment” is defined as the highest use of labor resources that can be sustained over time without creating an acceleration in inflation. “When employment is at its maximum sustainable level, there will be low and stable inflation. However, if employment is…

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Filed under: News - @ November 6, 2025 12:28 am