New Zealand is leading the pack for major nations in its recent decision to increase interest rates by a quarter percent at 2.75%. Reserve Bank of New Zealand Governor Graeme Wheeler said in a statement that it is essential to increase the official interest rate to ensure that it does not contribute further to demand. The Reserve Bank is expecting to raise the interest rates by 2% over a two year span.
Prices for dairy, surging house prices and increasing inflation have all been attributed by the RBNZ as factors for the interest rate increase. The New Zealand dollar rose above 85 cents after the RBNZ decision.
Read more about this on the Age website.