The Reserve Bank of New Zealand raised the official cash rate (OCR) by 25 basis points to 5.5% per annum, which was the highest level since December 2008. The central bank's decision coincided with analysts' forecasts. The Australian regulator raises the rate following the results of the 12th meeting in a row. As a result, since October 2021, it has grown by 525 bps – stronger than the key rates of other world central banks. At the same time, representatives of the Reserve Bank noted that they are ready to take a break in the cycle of tightening monetary policy. According to the forecasts of the Central Bank, the rate has reached a peak level and will remain at the current level until the third quarter of 2024. After that, the regulator can begin to reduce the value of the base rate. RBNZ also noted that inflation in the country remains too high, and the risks of a recession this year are still relevant. «The official cash rate will need to remain at a restrictive level for the foreseeable future, to ensure that consumer price inflation returns to the 1-3 percent annual target range,» said an RBNZ statement. To date, inflation in New Zealand is at the level of 6.7%.
