The Reserve Bank of New Zealand (RBNZ) today raised its benchmark interest rate by 0.25% to 1.0%, bringing rates back to pre-pandemic levels for the third straight time. It also indicated that it would sell bonds to counter rising inflation.
Economists had previously forecast that the RBNZ would raise interest rates by 0.25% to 1.0%.
The RBNZ has signaled that it will continue to take a more aggressive approach to tighten monetary policy. This helped the New Zealand dollar to rise by more than 0.5% to $0.6765 after the rate hike.
The RBNZ’s Monetary Policy Committee said it agreed that “a further reduction in monetary policy stimulus is appropriate to maintain price stability. It also supports sustainable employment at full potential.”