The fastest monetary tightening central banks are expected to start cutting rates in the third quarter

New Zealand’s central bank raised interest rates by a quarter of a percentage point to 5.5% as expected.

Surprisingly, the bank indicated that no further tightening would be needed to curb inflation, sending the New Zealand dollar lower.

The central bank stated that interest rates have peaked, and the cut is expected to start in the third quarter of 2024.

New Zealand has been at the forefront of monetary tightening, surpassing even the Federal Reserve in the measure of rate hikes.

The bank raised the interest rate during the month of April from 4.75% to 5.25%, and raised the interest rate by 50 basis points in February and by 75 basis points last November, while inflation stopped at 7.2% in the last quarter of last year.

The New Zealand central bank targets inflation between 1% and 3%.

2023-05-24 09:53:00


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