New Zealand's central bank raises key interest rate to 5.5% but signals next move will be a cut

New Zealand’s central bank has raised its benchmark interest rate to 5.5% but signaled its next move would be a cut, sparking a sell-off in the currency

WELLINGTON, New Zealand -- New Zealand's central bank raised its benchmark interest rate again Wednesday to 5.5% but signaled its next move would be a cut, sparking a sell-off in the currency.

Wednesday's quarter-point rate rise was the 12th straight hike imposed by the Reserve Bank of New Zealand since October 2021. But for the first time since the tightening cycle began, the bank projected the next move would be a cut, which would likely come later next year.

The projection was more dovish than markets had expected and caused the New Zealand dollar to drop by more than 1% to trade at a little below U.S. 62 cents.

Like many central banks around the world, the Reserve Bank of New Zealand has been raising rates to try and tame iNFLation, which in New Zealand has fallen from a recent peak of 7.3% last June to 6.7%.

That remains well above the bank's target inflation rate of around 2%.

New Zealand's unemployment rate remains low at 3.4%, putting upward pressure on wages and iNFLation.

The bank's monetary policy committee said global economic growth remains weak and iNFLation pressures were easing.

“Consumer spending growth has eased and residential construction activity has declined, while house prices have returned to more sustainable levels,” the committee said in a statement. “More generally, businesses are reporting slower demand for their goods and services, and weak investment intentions.”

The committee said an immigration surge since COVID-19 restrictions were lifted was expected to ease. The bank said the surge had helped relieve the labor shortage but its net effect on spending remained unclear.

A summary of the committee's meeting showed that some members favored keeping the benchmark rate at 5.25%. The decision to hike was made by a 5-2 vote, a departure from the typical consensus decisions.

The key rate remains at its highest level since the global financial crisis in 2008.

Comments

Post a Comment

Popular posts from this blog

Skyrim Player Finds Sigurd Mysteriously Dead, Prompts Whudunnit Theories

It's a lovely morning in Whiterun. You wake up invigorated by the spirit of a dragon you killed yesterday, and are ready to test out your new Shout. You stop by the blacksmith to craft 30 Iron Daggers to level up your blacksmithing, and then make your way to meet Jarl Balgruuf. Heimskr incessant praises to Talos don't seem to bother you, and no one talks about taking an arrow to the knee. It's a perfect day. That's when you see it – Sigurd's body laying on top of his wooden logs. A murder has been committed, and it was someone within Whiterun. This is more or less the same scenario that Redditor JDGumby went through during one of their recent walks around Whiterun (thanks, Game Rant). Sigurd was lying dead on his logs, but the player wasn't the one who killed him. The city doesn't have any hostile NPCs, so it's quite the mystery. Here's usually where the cello music would swell and Benoit Blac would enter, but instead, JDGumby decided to ask th
Read more

Rasmus Hojlund booked in for Man Utd medical

Rasmus Hojlund will Travel to Manchester on Tuesday for a medical ahead of sealing his move to Manchester United, 90min understands. After lengthy negotiations with Atalanta, United have agreed to a deal which will see them part with a guaranteed €75m (£64m, $82.3m), with a further €10m (£8.6m, $11m) in potential add-ons, to sign the 20-year-old striker. With personal terms agreed earlier in July, all that is left is for Hojlund to pass his medical and sources have confirmed to 90min that the Dane is due in Manchester on Tuesday to undergo his checks. Should all go to plan, Hojlund will become United's third signing of the summer, following Mason Mount and Andre Onana in agreeing moves to Old Trafford. Denmark teammate Christian Eriksen recently gave fans an insight into what they can expect from Hojlund, telling PA : "What's he like? He's a strong number nine. He's developed a lot in the last year from when I first saw him with the national team [to] a year&
Read more

Court throws out conviction after judge says Black man 'looks like a criminal to me'

An appeals court says a Detroit federal judge violated the rights of a Black man when he said in court, ‘This guy looks like a criminal to me DETROIT -- An appeals court on Thursday overturned the drug conviction of a Black man, saying his rights were violated by a Detroit federal judge who was upset over delays in the case and declared: “This guy looks like a criminal to me.” “Such remarks are wholly incompatible with the fair administration of justice,” the 6th U.S. Circuit Court of Appeals said. U.S. District Judge Stephen Murphy III, who is white, apologized nearly two years later when the case against Leron Liggins finally was ready for trial. He explained that he was mad at the time “and I regret it.” Nonetheless, the appeals court said Murphy should have removed himself as Liggins' attorney had requested. The court threw out a heroin distribution conviction and 10-year prison sentence and ordered a new trial with a different judge . Allowing the conviction to stand “wou
Read more