New Zealand's central bank raises cash rate to 2.5%, as expected
- The central bank has slashed rates by 325 basis points since August 2024 to support an economy struggling to gain traction as inflation receded
WELLINGTON: New Zealand’s central bank raised its benchmark official cash rate by 25 basis points to 2.50% on Wednesday, moving to curb renewed inflation pressures despite an unsteady economic recovery.
The decision was in line with 22 of 28 economists polled by Reuters, who had forecast the Reserve Bank of New Zealand would hike rates by a quarter point.
The central bank has slashed rates by 325 basis points since August 2024 to support an economy struggling to gain traction as inflation receded.
New Zealand dollar rallies as RBNZ raises rates, signals more hikes
However, the oil shock tied to the Iran war is expected to have pushed inflation significantly beyond the central bank’s target range of 1% to 3%, forcing policymakers to bring forward rate hikes despite an unsteady recovery.
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