RBNZ Warns Higher Oil Prices Threaten Near-Term Inflation

The Reserve Bank of New Zealand (RBNZ) has issued a warning about the potential impact of rising oil prices on inflation. According to Governor Anna Breman, higher oil prices could lead to increased near-term inflation beyond previous forecasts.

In a recent speech in Dunedin, Breman stated that ongoing rises in global oil prices and higher long-term interest rates reflect a challenging global environment. If oil prices persist, they are expected to result in higher near-term inflation than assumed in the September statement.

The RBNZ raised its official cash rate by 25 basis points (bps) to 2.75% at its September policy meeting. It predicted annual consumer price inflation would ease to 3.9% in the September quarter from 4.1% in the previous quarter.