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Anna Breman Leads Reserve Bank of New Zealand Decision to Raise Official Cash Rate to 2.75 Percent

The Reserve Bank of New Zealand raised the Official Cash Rate (OCR) by 25 basis points to 2.75 percent from 2.50 percent. The administration announced the decision was made by consensus to gradually remove monetary stimulus and return inflation to the 2 percent target mid-point while supporting growth and employment.

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Anna Breman, the Reserve Bank of New Zealand Governor, stated that the economic recovery has most likely resumed but remains uneven. The committee noted that the export sector is expected to remain resilient and household spending is expected to gradually increase. While the recovery is expected to strengthen and broaden, the committee remains vigilant regarding the balance of risks to medium-term inflation. Future policy decisions will depend on the committee's judgment of the balance of risks to medium-term inflation. The committee noted that the OCR path is not pre-determined, and further increases may be required depending on the economic outlook. The New Zealand Dollar experienced intense selling pressure immediately following the announcement.

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