New Zealand's official cash rate has been lifted to 1 per cent, the Reserve Bank announced on Wednesday afternoon.
The Monetary Policy Committee on Monday increased the OCR by 0.25 basis points.
It comes after an increase in November 2021 by 0.25 per cent to 0.75 per cent.
The committee agreed to commence the gradual reduction of the Reserve Bank’s bond holdings under the Large Scale Asset Purchase (LSAP) programme - through both bond maturities and managed sales.
The Monetary Policy Committee also agreed to reduce monetary stimulus to maintain price stability. (Source: 1News)
It also agreed to reduce monetary stimulus to maintain price stability and support maximum sustainable employment
The Reserve Bank said headline CPI inflation was “well above its target range, but would return towards the 2 per cent midpoint over coming years.
“The pace of global economic growth has slowed however, due to the general elevated uncertainty created by the persistent impacts of Covid-19, and clear signals that monetary conditions will tighten over the course of 2022,” the central bank said.
It also stated that in New Zealand, underlying economic strength remained in the economy, however some “short-term economic disruption” was expected due to the Covid-19 pandemic.
The Reserve Bank pointed out that high vaccination rates across New Zealand would “assist significantly to reduce this disruption”.
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