New Zealand’s central bank raised interest rates to the highest level in more than 5 years on Thursday but said it would now take a breather as it looked at the impact of its tightening and watched inflation in the economy.
The Reserve Bank of New Zealand lifted its official rate by 25 basis points to 3.50 percent, as expected, the fourth consecutive rise in as many meetings. It said rates would need to return to a more neutral level, but the economy appeared to have slowed amid falling commodity prices and moderate inflation.
“It is prudent there now be a period of assessment before interest rates adjust further to a more-neutral level,” RBNZ Governor Graeme Wheeler said in a statement. He said the speed and extent of future rises would depend on the impact of its 100 basis points of tightening since March, and the strength of data.
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