New Zealand’s chief central banker said on Wednesday that monetary policy isn’t on a fixed path and will be adjusted if the inflation outlook shifts.

Anna Breman, the newly appointed Reserve Bank of New Zealand (RBNZ) governor, told reporters that the monetary policy committee is closely monitoring all fresh data, including inflation and economic growth figures.

“I'd like to stress that there is no preset course for monetary policy,” she said.

“It's really important to see that we have a forward-looking policy rate path that's being published... but it's also important to stress that, of course, if circumstances change, if we get new data that shows that the economy and inflation is going in a different direction from what we expected, we will adjust the monetary policy," the governor went on to add.

New Zealand’s central bank lowered the official cash rate by 25 basis points to 2.25% in late November and indicated that its easing phase was complete.

While the bank expects the cash rate to stay unchanged over the next year, markets are now anticipating more than two rate hikes in 2026, Reuters news agency reports.

Breman noted that financial conditions have tightened “a bit,” and said the monetary policy committee needs to assess how that shift is influencing the broader economy.

“Right now our focus will be to see how this affects households and firms and businesses and if that is in line with economic developments that we are expecting,” she stated.

The RBNZ governor also said that although there were some positive indications of an economic rebound, it remained essential to rely on data to verify that progress, “while still maintaining the focus on keeping inflation low and stable.”

In the third quarter, New Zealand’s inflation stood at 3.0%, hitting the upper limit of the central bank’s 1% to 3% target range. The central bank had earlier indicated that inflation is likely to ease as a result of excess capacity in the economy.

Breman added that the Reserve Bank “would maintain a laser focus on our core mandate” of low and stable inflation.