The Reserve Bank of New Zealand raised interest rates by 50 basis points, to reach 4.75% from 4.25%, as expected at the first bank meeting in 2023, which was held this morning, Wednesday, February 22, bringing interest levels to their highest levels in 14 years.
And the interest statement stated that the bank is expected to continue to tighten monetary policy in the coming period until inflation rates stabilize, as the bank kept its expectations for the peak rate of interest rates at 5.5% this year.
The Board expects that annual inflation will reach 7.3% in the first quarter of this year, and it will be more stable in the second half of this year, and that it will return to the bank’s target of 1-3% by the third quarter of 2024, as previously expected.
The reaction of the New Zealand dollar was positive in the first reaction, given that 50 basis points were calculated previously, to rise by about 30 points against the US dollar, before it retreated and is now trading at 1.6220 levels.
01/11/2024
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