New Zealand's Reserve Bank raises interest rates

The Reserve Bank of New Zealand (RBNZ) has increased its benchmark interest rate by another 50 basis points in order to maintain price stability and support maximum sustainable employment. According to the statement made by the RBNZ, the benchmark interest rate was raised from 4.25 percent to 4.75 percent. Markets also expected an increase in interest rates by the announced rate. Thus, the interest rate has been increased by 450 basis points since the record low of 0.25 percent in October 2021. The RBNZ indicated that increasing the interest rate would help inflation return. The statement said, "The Committee decided that monetary conditions should be tightened further, as set out in the November Statement, to ensure that there are sufficient constraints on spending to bring inflation back to the 1-3 percent annual target range." The Committee stated that it remains committed to achieving its monetary policy target. Consumer prices in New Zealand are at 7.2 percent.