RBNZ Hikes Rates as Inflation Concerns Drive NZ Bond Yields

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

The benchmark interest rate was hiked to 2.75%, narrowing the gap with the US Federal Reserve's benchmark rate, currently between 3.50% and 3.75%.

New Zealand's 10-year bond yield jumped to 4.86%, its highest level since March 23rd this year, as investors expect the Fed to hike interest rates soon.

The NZD/USD exchange rate continued its downward trend, reaching a low of 0.5835, down over 2.6% from its peak in August.