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RBNZ Raised Official Cash Rate To 0.75%

The Reserve Bank of New Zealand's Monetary Policy Committee on Wednesday agreed to raise its Official Cash Rate (OCR) by 25 basis points as expected, from 0.50 percent to 0.75 percent.

The level of global economic activity continues to rise, supported by accommodative monetary and fiscal policy settings, and the relaxation of COVID-19 health-restrictions, the bank said. The pace of global economic growth has ebbed however, due to the elevated uncertainty created by the persistent COVID-19 virus.

Global supply-chain disruptions are causing both cost pressures and constraints on production, at a time when consumer demand remains strong, the bank added.

Central banks globally face the challenge of distinguishing between transitory price increases and underlying sustained inflation pressures to assess the need for, and timing of, reductions in the level of monetary policy stimulus.

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