New Zealand raises rate 25bp to 3%

The Reserve Bank of New Zealand today raised the official cash rate 25 basis points to 3 per cent but said future increases were likely to moderate.

Governor Alan Bollard said: “The pace and extent of further OCR [official cash rate] increases is likely to be more moderate than was projected in the June Statement”

He also noted inflation was likely to rise slightly above target, but only temporarily: “The coming increase in the rate of GST [the goods and service tax] and other government-related price changes are likely to temporarily push annual CPI inflation above 3 percent.”