Economists had predicted changes - and change has arrived
The Reserve Bank of New Zealand (RBNZ) has lifted the official cash rate (OCR) by 0.50 basis points to 1.50%, with interest rates expected to rise in due course.
This rise marks the fourth OCR increase in the last eight months.
The 0.50 basis points increase does not surprise the finance industry, with experts predicting further OCR rises throughout the year.
The Monetary Policy Committee agreed that moving the OCR to a more neutral stance sooner will reduce the risk of rising inflation expectations.
“A larger move now also provides more policy flexibility ahead in light of the high uncertain global economic environment,” said Reserve Bank staff member Adrian Orr.
“The level of global economic activity continues to generate rising inflation pressures, exacerbated by ongoing supply disruptions in large part driven by COVID-19.”
“The Russian invasion of Ukraine has significantly added to these supply disruptions, causing prices to spike in internationally traded commodities and energy.”
