New Zealand raises interest rates again due to rising inflation

Wellington (dpa-AFX) – The Reserve Bank of New Zealand has raised its key interest rate again. The key rate will rise 0.5 percentage point to 3.0 percent, Wellington currency watchers announced on Wednesday. This is the fourth time in a row that the central bank has raised interest rates in order to further prepare against high inflation. Analysts unanimously expected this move. New Zealand’s key interest rate is currently at its highest level in 7 years.

Looking at the upcoming interest rate meetings, the central bank indicated further rate increases. The central bank said inflation was still too high and the labor supply was tight. The measures aim to return the inflation rate to the target range of 1 to 3 percent. According to the latest data released in July, the inflation rate reached 7.3% in the second quarter, the highest rate in more than 30 years.

The New Zealand dollar reacted with gains in the morning, as yields on local government bonds rose. The main reasons for the rise in inflation are the sharp rise in the prices of energy and raw materials as well as the high prices of many industrial primary products as a result of bottlenecks in the global supply chain. /stk/la/mis