New Zealand Central Bank Raises Benchmark Rate to 2.50% by 25bp on July 8

According to RBNZ, on July 8, the New Zealand central bank raised its official cash rate (OCR) to 2.50%, a 25 basis point increase approved unanimously. The decision addresses inflationary pressures stemming from the Iran war and related oil price shocks. The RBNZ noted that while international oil prices have declined since the Strait of Hormuz partially reopened, the shock's impact will persist, and medium-term inflation pressures remain uncertain. The central bank expects economic growth to resume in the third quarter after a slowdown in the second quarter due to the oil shock. It signaled further rate increases may be necessary to bring inflation back toward its 2% midpoint target.
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