NEW Zealand’s central bank today delivered its eighth consecutive interest rate hike, sending the country’s borrowing costs to their highest level in more than seven years, as it joins a global battle against surging inflation.

The Reserve Bank of New Zealand stayed true to its course of the past 18 months, unveiling another 50 basis-point increase in its key rate to 3.5% – a level not seen since May 2015 – and warned of more rises in a bid to stymie price rises.

The move came as its counterparts in the United States, Europe and elsewhere ramp up rates to curtail decades-high inflation, fuelling concerns they could trigger a prolonged global downturn. 

The central bank warned inflation could climb beyond the current 7.3% rate, which is already a 32-year high.

Today’s announcement came on the same day New Zealand’s government unveiled a better financial position than expected in its accounts to the end of June.

A rise in tax revenue and slower growth in spending resulted in a deficit of NZ$9.7 billion (RM25.85 billion), considerably less than the forecast deficit of NZ$19 billion. – AFP, October 5, 2022.