The Reserve Bank of New Zealand hiked its policy rate by 25 basis points, citing persistent inflation pressures and scope for more tightening.
The Reserve Bank of New Zealand increased its official cash rate by 25 basis points to 2.5%, marking its third consecutive hike this year. The move reflects concerns over persistent inflationary pressures despite recent easing in energy prices.
Prior to the decision, markets had priced in a 25 basis point increase, aligning with the central bank’s guidance. The RBNZ’s statement emphasized that further tightening is likely to ensure inflation returns to its target range.
The New Zealand dollar strengthened following the announcement, as traders adjusted positions to reflect the bank’s hawkish stance.