New Zealand’s central bank delivers its first rate increase in three years, citing persistent inflation risks and pledging further tightening.
The Reserve Bank of New Zealand lifted its official cash rate by 25 basis points to 2.50%, the first hike in three years, as inflation pressures remain elevated. Governor Adrian Orr indicated additional rate increases are likely to curb inflation risks, which may have peaked but remain a concern for policymakers.
The move matched market expectations, with the NZD strengthening following the announcement. The RBNZ’s decision contrasts with recent signals from other central banks, including the Fed, which has turned more optimistic on inflation as oil prices retreat. The PBOC set the USD/CNY midpoint at 6.8077, slightly weaker than estimates.
Markets reacted with the NZD rallying, while Asian equities showed mixed performance, with South Korean shares recovering early losses and Japanese markets trading higher.