New Zealand raises interest rates more than expected

The Reserve Bank of New Zealand raised its policy rate by 50 basis points, above market expectations. With this increase, the policy rate rose from 4.75 percent to 5.25 percent. The Reserve Bank of New Zealand (RBNZ) increased its policy rate by 50 basis points in order to return inflation to its medium-term price target range. In a statement, the bank's monetary policy committee said that the benchmark interest rate was raised from 4.75 percent to 5.25 percent. Markets expected the interest rate to increase by 25 basis points. Noting that employment in New Zealand was "above the maximum sustainable level," it emphasized that they aimed to reduce inflation to their target of 1-3 percent. New Zealand's consumer price index in the last quarter of 2022 was 7.2 percent, hovering around historic highs seen in October.