Reserve Bank of New Zealand Raises Rates to 3.25%

New Zealand’s central bank delivered its third consecutive rate hike on Thursday, and it’s likely to make that four in a row judging by hawkish comments, some analysts say.

The Reserve Bank of New Zealand (RBNZ) lifted its key interest rate by 25 basis points to 3.25 percent. While that move was not a surprise, analysts had expected the central bank to suggest a slowdown in the pace of monetary tightening.

Instead policy makers said further rate increases would be needed to curb inflation in a robust economy.

“Effectively, the RBNZ is a lot more focused on domestic mortgage rates. There’s been a lot of competition in the domestic mortgage market in New Zealand which has been pushing rates down,” said Robert Rennie, the global head of foreign exchange strategy at Westpac Bank in Sydney.

“The RBNZ is unhappy with that and there is a risk that we see another rate hike in July, which would make it four in a row,” he added.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza