New Zealand raises interest rates for the fourth time

New Zealand’s central bank has raised its key interest rate again. As Wellington monetary authorities announced on Wednesday, the key interest rate will rise 0.5 percentage point to 3.0 percent. In order to further prepare against high inflation, the central bank has therefore raised interest rates for the fourth time in a row. Analysts unanimously expected this move. The interest rate in New Zealand is currently at its highest level in 7 years.

The central bank announced further rate hikes for the upcoming interest rate meetings. 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 in the second quarter was 7.3 percent, the highest level in more than 30 years.

The New Zealand dollar reacted with gains in the morning, as yields on local government bonds rose. The causes of high inflation in particular are due to 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 global supply chain bottlenecks.