Hiking

New Zealand c.bank on a hiking spree as economic climate gets hotter – Reuters

Summary

BENGALURU, Nov 19 (Reuters) – New Zealand’s central bank will raise rates for the second meeting in a row on Wednesday and continue with its tightening spree next year as it tries to put a lid on rising inflation and cool an overheated housing market, a Reuters poll found.

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BENGALURU, Nov 19 (Reuters) – New Zealand’s central bank will raise rates for the second meeting in a row on Wednesday and continue with its tightening spree next year as it tries to put a lid on rising inflation and cool an overheated housing market, a Reuters poll found.

Large amounts of fiscal and monetary stimulus injected to alleviate pandemic pain have helped the economy recover strongly and pushed inflation to its highest and the jobless rate to its lowest in over a decade.

That has prompted financial markets to price in a series of interest rate hikes through next year that economists have mostly matched in their forecasts.

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All but one of 20 economists in a Nov. 15-18 Reuters poll predicted the Reserve Bank of New Zealand (RBNZ) would raise the official cash rate by 25 basis points to 0.75% at its Nov. 24 policy meeting. Markets are fully pricing in a 25 basis point rise too.

The one dissenter expected a 50 basis point hike.

“Unlike other central banks, the RBNZ doesn’t have the luxury of time on its side. They are on a hiking cycle for sure; we have seen one rate rise, we will get another one next week and I think they will raise in every meeting into next year,” said Jarrod Kerr, chief economist at Kiwibank.

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Source: https://www.reuters.com/markets/asia/new-zealand-cbank-hiking-spree-economic-climate-gets-hotter-2021-11-18/