New Zealand has raised interest rates for the 11th time due to inflation

He Reserve Bank of New Zealand (RBNZ) decided on Wednesday night to hike the benchmark interest rate 5.25% by 50 basis pointsIts highest level since late 2008. This is the eleventh consecutive interest rate hike adopted by the Committee, which has increased the benchmark interest rate 500 basis points from October 2021, when it began to tighten its monetary policy.

Headed by the central bank Adrian Orr was Precursor at the start of an interest rate hike cycle, months before the central bank changed rates and the ECB did the same. RBNZ noted This increase is necessary to return inflation to the 1-3% range in the medium termAs inflation continues to be high and persistent, employment is above its maximum sustainable level, he explains in his report.

The Monetary Authority notes the recent severe weather events that have hit the North Island leading to higher prices for certain goods and services. “This high short-term CPI inflation increases the risk that inflation expectations will be above our target range. In the medium term, the panel expects economic activity to be supported by post-monetary restructuring efforts. Demand for resources is expected to increase inflationary pressures. More than expected,” he adds.

However, the Banco de la Reserva believes that economic activity in the December quarter was weaker than expected, suggesting that the economy is cooling. Despite this, demand clearly exceeds the capacity of supply, which maintains annual inflationary pressure. Additionally, the central bank has highlighted the strength of the New Zealand financial system Times of stock market volatility due to the bankruptcy of Silicon Valley Bank And this Credit Suisse and UPS affiliation.

In terms of future projections, RBI has predicted that economic growth will weaken in 2023 due to global recession. The External demand will weaken due to lack of activity in the global economy Among the main commodities exported, an increase in tourism will partially offset this drop in income. The next meeting of the committee to revise the fee will be held on May 23.