Reported 5 months ago
The Reserve Bank of New Zealand kept interest rates unchanged at 5.5% but signaled that policy will need to remain tight for longer to combat stubborn inflation, with cash rate cuts now expected to start later in the third quarter of 2025 instead of the second quarter. The central bank is finding it challenging to bring inflation back to target levels despite the country being in a recession, leading to expectations of rate cuts later this year or in the first or second quarter of next year by some economists. Governor Adrian Orr indicated that a rate hike was a real consideration at the recent meeting, emphasizing the Committee's limited tolerance for inflation surprises. The New Zealand dollar surged almost 1% after the decision before settling at a 0.4% gain on the day at 61.19 US cents.
Source: YAHOO