New Zealand's central bank hiked interest rates for the first time in seven years and signaled further tightening to come, as it looks to get on top of inflationary pressures and cool its red-hot housing market
In neighbouring Australia, the central bank held interest rates at a record low 0.1% for an 11th straight month on Tuesday.
But with its borders still shut, labour and goods shortages are pushing up inflation, as well as contributing to a surging property market, which has been driven by ultra-low interest rates. The central bank said headline CPI inflation is expected to increase above 4% in the near-term but return towards its 2% midpoint over the medium term.
But economists said the RBNZ may not race ahead with its hiking cycle in view of the current global uncertainty and the Delta variant outbreak dragging on in Auckland.
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