Economics
New Zealand Raises Rates for Third Time, Signals Higher Peak
- RBNZ to begin gradual reduction of QE bond holdings in July
- Monetary policy committee open to 50bp rate hikes if needed
Outside the Reserve Bank of New Zealand in Wellington.
Photographer: Birgit Krippner/BloombergThis article is for subscribers only.
New Zealand’s central bank raised interest rates for a third straight meeting and signaled it will need to hike further than previously expected to contain inflation, sending bond yields and the currency higher.
The Reserve Bank’s Monetary Policy Committee increased the official cash rate by 25 basis points to 1% Wednesday. New forecasts published by the RBNZ show the cash rate climbing to 2.5% over the next 12 months and peaking at about 3.25% at the end of 2023. In November, it had forecast a peak of about 2.5%.