THE New Zealand Reserve Bank has raised interest rates by 25 basis points to 8.25%.
Reserve Bank Governor Alan Bollard said the economy is running strong.
“We are recording continued big increases in international commodity prices, especially dairy, reflecting solid world demand for our products. This is very good news for
“However, the continued tight labour market, high capacity use, and rising oil and food prices all point to sustained inflationary pressures. That is why we are increasing the OCR today,” he added.
Bollard said the NZ dollar has reached very high levels recently, driven by US dollar weakness and New Zealanders’ heavy demand for borrowing.
He added that this level of the currency has been hurting exports.
“The high
“New Zealanders have been showing early signs of moderating their borrowing. Provided they keep this up, and the pressure on resources continues to ease, we think the four successive OCR increases we have delivered will be sufficient to contain inflation,” Bollard concluded.
Australian Property Journal