The Reserve Bank of New Zealand said it has raised the official cash rate a quarter of a percentage point to 0.75 per cent to maintain price stability and support maximum sustainable employment.
It expects CPI inflation to exceed 5 per cent in the near term before returning towards the 2 per cent midpoint over the next two years. The near-term rise in inflation is accentuated by higher oil prices, rising transport costs and the impact of supply shortfalls.
The central bank flagged further tightening given the medium-term outlook for inflation and employment.
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