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MNI BRIEF: RBNZ Cites Likely 7% Inflation In 50bps Rate Rise

MNI (Sydney)
SYDNEY (MNI)

New Zealand’s central bank has cited the risks from persistently high inflation in its decision on Wednesday to increase interest rates by 50bps to 1.50%.

The RBNZ said the move in the Official Cash Rate was needed to reduce inflation expectations, and that a “stitch in time” approach to monetary policy was consistent with that aim. The RBNZ said it expected inflation to peak at around 7% in the first half of 2022, from 5.9% at the end of the fourth quarter. The bank has a target range for inflation of between 1% and 3%, see: MNI STATE OF PLAY: RBNZ Seen Aiming Hikes For A Softer Landing.

The 50bps rise came after three consecutive increases of 25 basis points at every meeting since October, when the OCR was at a record low of 0.25%.

MNI Sydney Bureau | +61-405-322-399 | lachlan.colquhoun.ext@marketnews.com
MNI Sydney Bureau | +61-405-322-399 | lachlan.colquhoun.ext@marketnews.com

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