RBNZ Signals Further Tightening After Third Rate Rise: Economy

New Zealand’s central bank raised interest rates for the third time this year and signaled more tightening to come as the Christchurch rebuild and surging immigration fuel growth, sending the kiwi higher.

“It is important that inflation expectations remain contained and that interest rates return to a more neutral level,” Governor Graeme Wheeler said in Wellington after increasing the official cash rate by a quarter-percentage point to 3.25 percent. The Reserve Bank of New Zealand left its forecast for the 90-day bank bill rate broadly unchanged, suggesting borrowing costs may rise twice more this year.