Currency Buzz: RBNZ Lifts OCR By 25 Bps; NZ Dollar Firm

23 Feb 2022 , 10:12 AM

The New Zealand dollar jumped about 0.6% to trade firmly above $0.676 on Wednesday after the central bank raised official cash rate. New Zealands central bank raised its benchmark interest rate for the third time since October and reiterated that there will be more increases this year as it tries to prevent decades-high inflation from becoming entrenched. The Reserve Bank of New Zealand raised its official cash rate (OCR) by 25 basis points to 1.0% during the February meeting. This was the third consecutive rate hike that brings borrowing costs to pre-pandemic levels, amid soaring inflation and surging housing prices. The committee also stated that it will commence the gradual reduction of its bond holdings under the Large Scale Asset Purchase (LSAP) programme through both bond maturities and managed sales.

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