Last Thursday’s announcement by the Reserve Bank to hold the official cash rate at 5.5% was widely expected. Local expectations of further rises in 2024 are mixed. The Reserve Bank provided no guidance, other than stating that interest rates “may need to remain at a restrictive level for a more sustained period of time”. Floating and short-term rates were little changed after this announcement. Where we have seen change in the last month is in longer-term fixed rates. For example, five-year wholesale rates are up around 0.50% since early September and this flows through to longer term mortgage rates, and higher commercial fixed rates for the likes of asset finance funding. Longer term fixed interest rates are heavily impacted by global rather than local markets, and there is a “rates will be higher for longer” mentality in these markets. Your Finance New Zealand adviser can help you mitigate the impact of higher interest rates on the finances of your business if higher rates are significantly affecting your cashflow.