RBNZ Hikes Rates Again as NZ Bond Yields Skyrocket

The Reserve Bank of New Zealand (RBNZ) raised interest rates for the second consecutive meeting to combat inflation, which has remained above the 2% target in recent years.

The benchmark interest rate was increased to 2.75%, narrowing the gap with the US benchmark interest rate, which ranges between 3.50% and 3.75%.

New Zealand's ten-year bond yield jumped to 4.86%, its highest level since March 23rd this year, as investors expect a faster pace of rate hikes from the Fed in response to rising crude oil prices.

The NZD/USD exchange rate plummeted to 0.5835, down by over 2.6% from its August high, as it broke below key support levels and confirmed a bearish breakout.