New Zealand’s central bank raised rates by 25 basis points and indicated further tightening as inflation remains above target.
The Reserve Bank of New Zealand increased its Official Cash Rate by 25 basis points to 2.50% on Wednesday, citing the need to withdraw stimulus amid persistent inflation pressures. The move follows recent easing in oil prices but reflects concerns over lingering inflation effects from earlier shocks.
Annual headline inflation is projected to have peaked at 3.9% in the June quarter, easing to 3.3% in September and returning to the 2% target by mid-2027. Growth slowed in the June quarter but is expected to rebound as lower fuel prices support consumer spending.
The NZD strengthened after the decision, which the RBNZ said aimed to prevent an unwarranted easing in financial conditions. Committee members were split on the outlook for further rate rises.