New Zealand central bank blames inflation for restrictive policy

New Zealand’s central banker emphasized the persistence of the inflation challenge and the need for a “restrictive monetary policy” due to broad financial pressure. The current inflation rate of 4.7% is still considered high, and the aim is to bring it down to around 2%. The bank will reassess its stance on interest rates at the end of the month. Despite slight easing of inflation recently, expectations of rate cuts have diminished following positive local jobs data. The Reserve Bank of New Zealand has withdrawn pandemic-era monetary stimulus and raised rates by 525 basis points since October 2021. The inflation rate remains above the target range of 1% to 3%.