RBNZ raises rates as cyclone complicates outlook

“Devastating” impact of Cyclone Gabrielle creates economic disruption and prompts fiscal action

Reserve Bank of New Zealand, Wellington
Photo: Rachael King

The Reserve Bank of New Zealand raised its policy rate 50 basis points today (February 22) as it noted the “devastation” wrought by Cyclone Gabrielle complicated the outlook.

Policy-makers agreed to follow through on past guidance that further rate increases would be needed, taking the main rate to 4.75%. The main factors in the decision were core inflation that remains “too high”, employment above its sustainable level and “elevated” short-term inflation expectations.

In a statement, the RBNZ

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