Saturday, May 10, 2014

New Zealand raises interest rates

"The Reserve Bank of New Zealand has raised its official cash rate for the second time in two months, lifting rates to 3 per cent as it forges ahead with a policy-tightening cycle to ward off an inflation threat.
The RBNZ confirmed on Thursday it would increase interest rates to 3 per cent from 2.75 per cent amid a period of strong economic growth, in line with economists' expectations. The New Zealand economy grew by 3.5 per cent over the year to March, Governor Graeme Wheeler said, suggesting a slight upgrade from the previous estimate of 3.3 per cent. Last month, the New Zealand central bank became the first in the developed world to raise interest rates in this cycle.
The New Zealand dollar, or kiwi, jumped on the announcement, climbing to US86.24¢ from US85.78¢ defying the RBNZ's claim that the value of the currency is unsustainable. The kiwi rose almost 8 per cent from late January to its 52-week high of US87.16¢ on April 9."
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