Reserve Bank of New Zealand keeps interest rates unchanged, hints at possible rate hike later this year to address inflation risks

The Reserve Bank of New Zealand has decided to keep interest rates at their lowest level in three and a half years and hinted that, given increasing inflationary pressures, the next move could be a rate hike.

On Wednesday, the Reserve Bank of New Zealand decided to keep the official cash rate unchanged at 2.25%, in line with the predictions of 22 economists surveyed by Bloomberg. The bank's latest forecasts indicate that a 25 basis point rate hike later this year is not ruled out.

In its statement, the Reserve Bank of New Zealand said: "If the economy develops as expected, monetary policy may remain accommodative for some time. The Committee will continue to closely assess the data. As the momentum of economic recovery strengthens and the inflation rate continues to move toward the midpoint of the target range, monetary policy will be gradually normalized."

After the release of the monetary policy statement, the New Zealand dollar fell 0.45% against the US dollar, trading at 0.6022 USD.

Editor: Liu Mingliang