New Zealand hikes rates to 5.50% but suggests end of hike cycle

Madrid, May 24. (Europe Press) –

The Reserve Bank of New Zealand’s monetary policy committee has decided to raise its benchmark interest rate by 25 basis points to 5.50%, its highest level since late 2008.

However, in a statement released after the meeting, it ended the current cycle of interest rate hikes with the twelfth consecutive hike in the money price, which has increased the benchmark rate by 525 basis points since October. 2021.

In this way, the New Zealand central bank’s forecasts envisage keeping the benchmark rate at 5.5% until the third quarter of 2024, when money prices are expected to fall.

In their analysis, members of the committee praised the moderation in inflation and price rise expectations, as well as the slowdown in growth in household spending, adding modestly to global inflationary pressures.

In this sense, they expect inflation in the country to continue to decline and inflation expectations to fall with it, although major inflationary pressures will remain until capacity constraints are eased further.

“The panel agreed that the level of interest rates restrains cost and inflationary pressures,” the New Zealand central bank said, stressing that the benchmark rate should remain at a contained level for the foreseeable future to ensure annual inflation returns. The target range is 1% to 3%.