The New Zealand dollar extended its decline on August 13, 2026, after the Reserve Bank of New Zealand (RBNZ) released its quarterly inflation expectations survey showing a notable drop across both measured horizons.

New Zealand's 1-year inflation expectations for Q3 2026 came in at 2.6%, a sharp decline from the 3.4% recorded in Q2. The 2-year inflation expectations also eased, falling to 2.3% from the prior quarter's 2.5% reading, bringing the medium-term measure to within 0.3 percentage points of the RBNZ's 2% midpoint focus.

The RBNZ conducts this survey of businesses and households each quarter to gauge forward inflation expectations, which the central bank monitors closely as part of its monetary policy framework. Expectations surveys are particularly significant for policymakers because they provide insight into how firms and consumers anticipate price pressures, trends that can influence wage-setting and pricing decisions and become embedded in actual inflation dynamics.

The RBNZ's medium-term inflation target range is 1% to 3%, with a focus on the 2% midpoint.

The softer expectations figures have marginally reduced market expectations for a potential rate hike at the RBNZ's next monetary policy decision scheduled for September 2, 2026.

For additional context, a preview of the RBNZ tightening path noted that economists have been divided on the outlook, with the expectations survey serving as a key data point ahead of the upcoming decision: Preview - RBNZ tightening path in focus as economists disagree on expectations survey

Source: ForexLive / InvestingLive