The Reserve Bank of newzelnda raised interest rates by 75 basis points, to reach 4.25%, as expected at the bank’s meeting that was held this morning, Tuesday, November 23, as expected, to reach interest levels to their highest levels since 2009.

The interest statement stated that the bank is expected to continue tightening monetary policy in the coming period until inflation rates stabilize, despite expectations of a recession next year.

The board expects annual inflation to reach 7.5% in the fourth quarter of this year, and to decline to levels of 5% by the end of next year. It is not expected to see a decline in the bank’s target of 1-3% before 2025.

Market estimates indicate that interest rates may peak at 5.5% in the third quarter of next year, compared to 4.1% in previous expectations, while the Bank expects the New Zealand economy to contract in the second quarter of next year.

The Australian dollar’s reaction was positive, as the Australian dollar is trading against the US dollar this morning, Wednesday, at 0.6175 levels.