New Zealand announces biggest interest rate hike in 22 years

Central bank increases official cash rate by 50 basis points to 1.5%

By Gokhan Ergocun

ISTANBUL (AA) – New Zealand's central bank increased its interest rate – official cash rate – by 50 basis points to 1.5% on Wednesday.

It has been the biggest interest rate hike since May 2000, according to data by the Reserve Bank of New Zealand (RBNZ).

The bank's monetary policy committee agreed to continue tightening monetary conditions to ensure price stability and support maximum sustainable employment.

"They agreed that moving the official cash rate to a more neutral stance sooner will reduce the risks of rising inflation expectations," it added.

The recent global developments regarding the COVID-19 pandemic and the Russia-Ukraine war increase inflation pressures and deepen supply disruptions, the bank said.

"The Committee will remain focused on ensuring that current high consumer price inflation does not become embedded into longer-term inflation expectations," it added.

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