New Zealand Central Bank Hikes Rates Again, Flags Gradual Tightening

New Zealand's central bank raised its official cash rate by 25 basis points to 2.75 per cent on September 2, in a widely expected move.

The Reserve Bank of New Zealand (RBNZ) flagged further tightening as likely, but emphasized that this would be gradual and saw significant downside risks to the economy.

The decision was based on inflation proving sticky and signs emerging that the economy was regaining traction.

The RBNZ raised rates for the first time in more than three years in July, after inflation proved stubborn and the economy showed signs of recovery.