RBNZ Raises Cash Rate to 2.75% Amid High Inflation Concerns

The Reserve Bank of New Zealand (RBNZ) raised its official cash rate by 25 basis points to 2.75% on Wednesday, in line with market expectations.

This is the second consecutive rate hike and the second increase this year, after the RBNZ raised the cash rate by 25 basis points in July.

The decision was driven by high inflation rates, with annual consumer-price inflation rising to 4.1% in the June quarter due to higher fuel prices following the Middle East conflict.

However, underlying inflation measures remained within the RBNZ's 1%-3% target range, and the central bank expects inflation to return to the target band by mid-2027.