RBNZ Hikes Rates Again Amid Persistent Inflation

The Reserve Bank of New Zealand (RBNZ) has raised its Overnight Cash Rate by 25 basis points to 2.75% as it continues to withdraw monetary stimulus in response to high inflation.

Annual consumer-price inflation rose to 4.1% in the June quarter, driven largely by higher fuel and related prices following the Middle East conflict.

The RBNZ expects inflation to remain elevated this year before returning to its 1%-3% target range by mid-2027 and reaching the 2% midpoint later next year.

The central bank's stance puts it on a similar tightening path to its regional peer Australia, whose central bank has already raised its cash rate three times this year as inflation proved more persistent than expected.