The Reserve Bank of New Zealand has shocked economists by lifting the official cash rate (OCR) by 0.5% at today’s monetary policy meeting. The rise has taken New Zealand’s OCR to 5.25%, which is the largest increase in the developed world:Economists universally expected the Reserve Bank to hike rates by only 0.25%. Instead the Reserve Bank focused on inflation, noting it “is still too high and persistent, and employment is beyond its maximum sustainable level”. New Zealand’s economy is already falling into recession, with the economy contracting over the December quarter. This means that monetary conditions will tighten without further hikes from the Reserve Bank.

Source: The Guardian April 05, 2023 14:55 UTC