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New Zealand is fighting inflation by raising interest rates

Wednesday, 11/24/2021 8:22 AM from

dpa-AFX

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The flag of New Zealand. pixabay.com

WELLINGTON (dpa-AFX) – New Zealand’s central bank is taking additional steps to curb high inflation. The key interest rate will be increased by a further 0.25 percentage points to 0.75 percent, the central bank announced on Wednesday after its interest rate meeting in Wellington. It is the second increase in a row that many analysts expected.

For the future, the monetary authorities announced further rate hikes at a faster pace. Central bank governor Adrian Orr said in front of the press that they are still pursuing a moderate tightening course for the time being. One reason for the rather cautious approach is the high debt of many households, which would suffer from rapidly and sharply rising interest rates.

With the interest rate hikes, the central bank is fighting against inflation in the country, which is currently almost five percent, well above the central bank’s target corridor of one to three percent. In addition, there is the good condition of the labor market, which leads to the expectation of rising wages and thus additional inflation. / Bgf / eas

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