At 10:00 Beijing time on Wednesday, the New Zealand Federal Reserve raised interest rates by 50 basis points to 3.00%, in line with market expectations. This rate hike makes New Zealand’s current interest rate level of 3% the highest since 2015 .
After the New Zealand Federal Reserve raised interest rates, the New Zealand dollar rose nearly 40 points against the US dollar in the short-term , and then fell back.
The RBNZ agreed that continued tightening of monetary conditions to maintain price stability and promote maximum sustainable employment remains appropriate. Core consumer price inflation in New Zealand remains too high and labour remains scarce. House prices have fallen steadily from their highs since November last year, and it expects to continue falling in the year ahead.
The RBNZ also said members now see the cash rate rising to a peak of 4.1% from the previous 3.95% and discussed the possibility that the neutral rate could be higher. The Reserve Bank of New Zealand expects inflation to slow to 3% by the second quarter of 2024. The Fed is firmly committed to ensuring that consumer price inflation returns to its 1% to 3% target range.