New Zealand’s central bank raised its key interest rate Wednesday by an unexpectedly high 50 basis points. The Reserve Bank of New Zealand raised its benchmark cash rate from 4.75% to 5.25%. Experts had been expecting a 25-basis-point hike. “Inflation is still too high and persistent, and employment is beyond its maximum sustainable level,” the central bank said in a statement, also citing lower-than-expected economic activity and higher prices for some goods and services following severe storms that hit the nation in February in its decision. New Zealand’s dollar
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gained against the U.S. dollar following the hike. The RBNZ’s move came a day after the Reserve Bank of Australia paused its campaign of interest-rate hikes, keeping its cash rate at 3.60% following 10 straight increases over the past year. RBA Gov. Philip Lowe said Wednesday that despite the pause, the central bank has not ruled out more rate hikes.
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