RBNZ Raises Cash Rate Again Amid Weakening Economy

The Reserve Bank of New Zealand (RBNZ) has raised the official cash rate for the second time in under two months, increasing it by 25 basis points to 2.75 per cent.

This decision is expected to prompt banks to reduce mortgage interest rates, but Retail NZ is warning that this will have an immediate impact on retailers as New Zealanders cut back on spending due to higher mortgage and rent costs.

Retail NZ chief executive Carolyn Young criticized the rate increase, stating, 'It has been a challenging few years for all Kiwis, with high unemployment and the rising cost-of-living continuing to hurt household budgets.'

The RBNZ's monetary policy committee reached a consensus vote on the decision after a lacklustre second fiscal quarter of growth for the country's economy.