Reserve Bank raises Official Cash Rate to 5.25% from 4.75%

The Reserve Bank (RBNZ) has raised the Official Cash Rate (OCR) by 50 basis points to 5.25%. The Reserve Bank says “Severe weather events in the North Island have led to higher prices for some goods and services. This higher near-term CPI inflation increases the risk that inflation expectations persist above our target range”.

ASB is forecasting another rise of 25 basis points in May due to the RBNZ noting the inflation is deemed “still too high and persistent”.

The New Zealand jumped almost 1%, from US 63.0 cents to US 63.7 cents, after the announcement yesterday.