New Zealand has raised interest rates for the first time in seven years as concerns over rising property prices and inflation outweigh the importance of the Pacific nation’s battle to control the spread of the coronavirus.
The Reserve Bank of New Zealand became the third central bank of a developed economy to raise rates since the pandemic began, the latest indication of an acceleration of the global tightening of pandemic-era monetary stimulus.
The RBNZ raised the country’s benchmark lending rate by 25 basis points to 0.5 per cent on Wednesday and signalled that more tightening was likely.
The central bank increased rates despite fears over greater economic damage as Auckland, the country’s biggest city, and several surrounding areas remained under strict lockdowns. Health officials are struggling to control an outbreak of the highly contagious Delta variant.
“Further removal of monetary policy stimulus is expected over time, with future…