• The Reserve Bank of New Zealand is set to maintain its key interest rate at 5.50% on Wednesday.
• The August policy decision appears to be a “close call” between a hold and a cut, as inflation expectations fall.
• The New Zealand Dollar’s fate hinges on the RBNZ policy action, updated forecasts and Governor Orr’s words.

Market participants are eagerly awaiting the Reserve Bank of New Zealand (RBNZ) interest rate decision, due on Wednesday at 02:00 GMT, as it is expected to be a “close call” for the central bank.

The RBNZ is expected to hold the Official Cash Rate (OCR) at 5.50%, maintaining that level since May 2023. However, the market is heavily divided, with analysts and industry experts anticipating a rates on-hold decision. A Reuters poll of 31 analysts, found 12 predicting a cut with the rest supporting the status quo.