RBNZ raises rates by record 75 bps to tame inflation

Further tightening: Pedestrians walk near the main entrance to the RBNZ in Wellington. The central bank is responding to stronger-than-expected inflation and near-record low unemployment. — Reuters

WELLINGTON: New Zealand’s central bank has raised interest rates by a record 75 basis points (bps) and signalled further tightening ahead, stepping up its inflation fight even as it forecasts a recession next year.

Short-maturity bond yields surged after the Reserve Bank’s Monetary Policy Committee lifted the Official Cash Rate (OCR) to 4.25% from 3.5% yesterday, as predicted by most economists.