New Zealand central bank hikes rates by 50 basis points
New Zealand’s central bank announced a bigger-than-expected rate hike on Wednesday.
The Reserve Bank of New Zealand said it was lifting rates by 50 basis points to 5.25%. Analysts had been expecting a 25 bps hike.
"The Committee agreed the OCR needs to increase, as previously indicated, to return inflation to the 1-3 percent target range over the medium term," the Bank said.
"Inflation is still too high and persistent, and employment is beyond its maximum sustainable level. The level of economic activity over the December quarter was lower than anticipated in our February Monetary Policy Statement and there are emerging signs of capacity pressures in the economy easing.
"However, demand continues to significantly outpace the economy’s supply capacity, thereby maintaining pressure on annual inflation."
This marked the eleventh hike in a row since October 2021 as the Bank looks to keep a lid on inflation, which is running at 7.2%.