Reserve Bank of New Zealand cuts interest rate to 50…

Madrid, 5 (Europe Press)

The Reserve Bank of New Zealand’s monetary policy committee decided to raise its benchmark interest rate by 50 basis points to 5.25%, its highest level since late 2008.

This is the eleventh consecutive hike in the money price adopted by the group, which has raised the benchmark interest rate by 500 basis points from October 2021.

“The committee agreed on the need to increase the official cash rate, as already indicated, to return inflation to the 1-3% range in the medium term,” the body responsible for the maritime country’s monetary policy announced. “Inflation is still very high and stable. In addition, employment is well beyond its maximum sustainable level,” he concluded.

However, the RBI has judged that levels of economic activity in the December quarter were lower than expected, suggesting that the economy is cooling. However, he asserted that demand “clearly” outstrips the capacity of supply, which “sustains annual inflationary pressures”.

On the other hand, the agency emphasized the robustness of the New Zealand financial system during times of “stock market volatility” due to the bankruptcy of Silicon Valley Bank and the merger of Credit Suisse and UBS.

In terms of future projections, the central bank predicts that economic growth will weaken in 2023 due to the effects of the global recession, lower residential construction and the restrictive monetary policy undertaken.

A slowdown in the global economy will lead to a weakening of external demand for key exported raw materials, while a surge in tourism will “partially offset” this drop in income.

The next meeting of the interest rate policy committee will be held on May 23.

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