New Zealand’s central bank lifts benchmark cash rate to 2.5%

Jul 12, 2022, 9:24 AM | Updated: 10:11 pm

FILE - New Zealand's Reserve Bank Governor Adrian Orr speaks to the media in Wellington, New Zealan...

FILE - New Zealand's Reserve Bank Governor Adrian Orr speaks to the media in Wellington, New Zealand on May 8, 2019. New Zealand’s central bank on Wednesday, July 13, 2022, lifted its benchmark interest rate by half a percentage point to 2.5% as it attempts to curb inflation. (AP Photo/Nick Perry, File)

(AP Photo/Nick Perry, File)

WELLINGTON, New Zealand (AP) — New Zealand’s central bank on Wednesday lifted its benchmark interest rate by half a percentage point to 2.5% as it attempts to curb inflation.

It was the third time this year that the Reserve Bank of New Zealand has lifted the cash rate by 50 basis points, following hikes in April and May. There was also a quarter percentage point rise in February.

The bank has forecast that the rate will peak at 4% late next year.

It said in a statement that it “remains appropriate to continue to tighten monetary conditions at pace to maintain price stability and support maximum sustainable employment.”

New Zealand’s inflation is running at 6.9% and the unemployment rate is 3.2%.

The bank manipulates interest rates to try to contain inflation to a target band between 1% and 3%.

The bank will next consider raising the cash rate at its meeting on Aug. 17.

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New Zealand’s central bank lifts benchmark cash rate to 2.5%