RBNZ Hikes Cash Rate to 2.75% Amid Optimism on Economic Recovery

The Reserve Bank of New Zealand has raised the official cash rate (OCR) by 25 basis points to 2.75%, its highest level since September last year, according to a recent decision.

The move is in response to inflation increasing to 4.1% in the June quarter due to higher fuel prices stemming from conflict in the Middle East.

Despite this, the bank's monetary policy committee remains optimistic about the economy, expecting labour market conditions to improve as the recovery gathers pace and inflation returning to the one to three percent target band by mid-2027.