New Zealand and South Korean Central Bank Interest Rates Lifted by 50 Basis Points
July 13, 2022
Central Banks in New Zealand and South Korea had hiked interest rates by 50 basis points today.
The Reserve Bank of New Zealand’s Official Cash Rate was raised to 2.50%, its highest level since early 2016 and up from a pandemic low of 0.25%. Three increases of 25 basis points have now been followed by three more of 50 basis points each, and more tightening lies ahead, according to a released statement. “The Committee is resolute in its commitment to ensure consumer price inflation returns to within the 1 to 3 percent target range.” It is currently at 6.9%, most in almost 32 years.
The Bank of Korea’s base rate now becomes 2.25%. It had been cut by 75 basis points in 2020 to 0.50%. Today’s increase of 50 basis points was the most this century. CPI inflation in South Korea of 6.0% in June was the most since mid-1998 and three times the 2% target. A released statement opines “The Board sees continued rate hikes as warranted, as inflation is expected to run above the target level for a considerable time.” The statement also projects slower future growth than imagined before.
Copyright 2022, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
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