Bank of New Zealand raises interest rate by 0.75% in view of high inflation

At its meeting today, the Reserve Bank of New Zealand raised its key interest rate by 0.75% to 4.25%, its highest level in nearly 14 years. It also signaled that it would raise interest rates further to curb the high inflation.

Analysts had previously predicted that the Reserve Bank of New Zealand will raise interest rates by 0.75%, which would be the ninth consecutive hike since monetary tightening began in October 2021.

The Reserve Bank of New Zealand said in a statement that the central bank expects the policy rate could peak at 5.5% in September 2023.

The New Zealand Bureau of National Statistics had previously reported that the Consumer Price Index (CPI) rose 7.2% in the third quarter from a year earlier and 2.2% from the previous quarter.

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