Kiwibank has made changes to its term deposit rates – the first significant move since the official cash rate decision on Wednesday.
By Susan Edmunds of RNZ
The Reserve Bank kept the OCR at 2.25% on Wednesday but signalled rate rises would come earlier and more quickly than previously expected later in the year.
Half the monetary policy committee took the view that rates should have risen this week.
Kiwibank said on Thursday it was increasing its nine-month term deposit rate by 15 basis points to 3.55%, and its one-year rate by five basis points to 3.9%.
Gareth Kiernan, chief forecaster at Infometrics, said they were small shifts.
"However, yesterday's unexpectedly close decision has seen swaps pricing for future meetings lifted by 5-10 basis points, because there's an implied greater level of certainty, as certain as things might be in what is currently a very uncertain environment, that the bank will lift the OCR consistently through most of the rest of the year.
"Financial markets had largely expected those rate rises anyway, but a bit of confirmation from the bank and the fact that we were closer than anticipated to a hike yesterday has increased market confidence about the track and therefore got it more fully priced in.
"Set against yesterday's movements, swap rates had come down 15-20 basis points over the last fortnight, so there could be a little bit of scope for further wholesale rate rises before banks need to pass those increases on, to either mortgage or term deposit rates."
Reserve Bank data showed two-year home loan rates have picked up most significantly from the trough of last year. From a low of 4.5%, they were now hovering around 5.2%.
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