Institution: The Reserve Bank of New Zealand is expected to have room to maintain interest rates unchanged.

ASB Bank predicts that the Reserve Bank of New Zealand will keep the official cash rate unchanged at 2.25% in July. The bank's core view remains that the official cash rate should normalize towards a neutral level of around 3.25%, with the first rate hike expected to start in September. However, ASB stated in a report to clients that the current developments in the US-Iran situation have reduced medium-term inflation risks and bought some time for the Reserve Bank of New Zealand. The bank added that despite this, the geopolitical environment remains unpredictable, with potential impacts on the official cash rate.