Bank of New Zealand Lifts 3-Year Freeze on Interest Rate by 0.25% to 2.75%
By Vittorio Hernandez | March 13, 2014 3:52 PM EST
The remains of a building can be seen on a closed and deserted street in the former central business district of the New Zealand city of Christchurch
The Reserve Bank of New Zealand raised on Thursday the official cash rate (OCR) by 0.25 basis points to 2.275 per cent. It ended the three-year freeze on interest rates imposed by the national government after the Christchurch earthquake.
Reserve Bank Governor Graeme Wheeler said, "By increasing the OCR as needed to keep future average inflation hear the 2,0 per cent target midpoint, the bank is seeking to ensure that the economic expansion can be sustained."
He hinted that there would be rate hikes in the future to curb inflation.
"The speed and extent to which the OCR will be raised will depend on economic data and our continuing assessment of emerging inflationary pressures," Mr Wheeler added.
With this development, New Zealand becomes the first developed country in 2014 to leave record-low lending rates.
Mr Wheeler said the central bank also plans to remove stimulus faster than previously forecast in a bid to contain prices. He added that it is necessary to increase interest rates toward a level that they no longer add to demand.
He said the central bank expects to further raise the rates by 2 percentage points more over two years.
To contact the editor, e-mail:
Join the Conversation
- Travel Alert: Australia Mulls To Review Airport Security Policy, Could Allow Scissors, Metal Cutlery Back In Planes
- 5 Likely Reasons Why You Are Not Getting Hired
- This Is How Obesity Weighs Down Global Economy By 2 Trillion Dollars Every Year
- Consumer Alert: Retailer Simons Goes Out Of Quebec, To Open Five Stores Across Canada
- Signs That You Are A Smartphone Zombie (And The Dangers This Poses)
- Russia Is Ready for Shooting War, Will Likely Win Looming Nuclear Showdown with U.S. – Report
- Kobani ISIS Fighter Sends Out Desperate Message For Prayers And Support: Euphoria Turns Into Desperation As Kurds Advance
- Home Depot Early Black Friday 2014 Sale Up To Nov. 29, 2014 Includes Special Buys On Appliances Such As Samsung Refrigerators, Whirlpool Electric Ranges And Hoover Vacuum Cleaners
- Microsoft Band Runs Out Of Stock, But Offers $10 Gift Voucher To Wait-Listed Customers
- ISIS War: US Airstrikes Lead to Growing ISIS Support In Syria; Russia Questions Coalition's Policies
- Google Joins Forces with GoPro Inc with New Google Maps Focusing on Destination
- Target Early Black Friday 2014 Sale Ad Released For Nov. 26, 2014 Includes Deals On Toys, HDTVs And Video Games Such As ‘FIFA 15’ And ‘NHL 15’ For Xbox 360 [WATCH VIDEO]