New Zealand’s central bank on Wednesday raised its benchmark interest rate to the highest level in six years and warned further rises were on the cards as it joins a global fight against surging inflation.
The Reserve Bank of New Zealand’s official cash rate was lifted 50 basis points for the third successive meeting, to 2.5 percent.
Borrowing costs are now at their highest level since January 2016 and the monetary policy committee reaffirmed a hawkish approach to tackling inflation, which sits at a 30-year peak of 6.9 percent.
“The committee is resolute in its commitment to ensure consumer price inflation returns to within the one to three percent target range,” it said in a statement.
The local dollar barely moved after a decision that had been widely anticipated.
“The name of the game is reining in 30-year high inflation. And there are few signs of price pressures letting up,” said economists at Kiwibank.
The move comes as central banks around the world are forced to lift rates as they battle decades-high inflation, fanning fears of another recession and sending equity markets tumbling.
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