Bank of New Zealand Governor Orr: Further rate hikes will only be raised if necessary to contain inflation expectations

Breakings ·  May 23 08:57
Bank of New Zealand Governor Adrian Orr has downplayed the possibility of another rate hike, saying that the central bank will only tighten policy further if it sees a need to curb inflation expectations. In an interview in Wellington on Thursday, Orr said, “It is only meaningful to raise interest rates again if we think that inflation expectations are deviating again and are starting to rise as actual inflation continues. We are confident that the inflation rate will fall to the 1%-3% range, and we just want to ensure that this target is achieved as soon as possible, rather than risk another spike in expectations.” The Bank of New Zealand kept the benchmark interest rate at 5.5% on Wednesday, but unexpectedly said it had considered raising interest rates. The Bank of New Zealand also raised the forward trajectory of cash interest rates, suggesting a rise in the risk of further policy tightening.

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