The Reserve Bank of New Zealand increased its policy rate by 25 basis points. Thus, the decision to increase interest rates was taken at three consecutive meetings.
While the Reserve Bank of New Zealand is increasing interest rates for the third time to combat inflation, it gave the message that it will continue its tightening cycle. The bank increased its policy rate by 25 basis points to 1 percent.
In their projections for the Bank’s policy rate, experts predicted that the interest rate will rise to 2.5 percent for the next 12 months, and that it will peak at 3.25 percent at the end of 2023. In November, the peak expectation for the policy rate was determined as 2.5 percent.
The bank said in a statement that there was a consensus for further tightening in November.
While inflation in the country reached its highest level in 31 years with 5.9 percent, expectations point to a continuation of the rise in inflation.