The Reserve Bank of New Zealand has now raised rates by 50 basis points at an unprecedented run of four consecutive meetings.
It also published a worsening set of forecasts in its August Monetary Policy Statement, believing the official cash rate will peak at 4.1 per cent in March 2023.
The rate sat at the emergency level of 0.25 per cent as recently as October, but has been lifted at every RBNZ meeting since then.“Core consumer price inflation remains too high, and labour resources remain scarce,” governor Adrian Orr said. The consumer price index inflation is at 7.3 per cent in New Zealand, the highest level in three decades.While the bank predicts inflation will begin to subside, Mr Orr said a gloomy international outlook would keep it above the target band.“Nevertheless, inflation is expected to return to the committee’s 1 to 3 per cent target range by the middle of 2024.
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