POLL-New Zealand set to deliver Asia's first pandemic-era rate hike
August 16, 2021
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WELLINGTON – New Zealand's central bank is expected this week to become the first in Asia-Pacific to raise interest rates since the pandemic began, amid concerns crisis-era stimulus is overheating the economy.
The majority of the 32 economists polled by Reuters expect the Reserve Bank of New Zealand (RBNZ) to raise the official cash rate (OCR) by 25 basis points from a record low to 0.50% at its policy meeting on Wednesday.
At least one economist expects a 50 basis-point hike this week. Most agree that there is more tightening coming and see the OCR reaching 1% by the end of the year and 1.5% by the end of next year.
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"The New Zealand economy has moved on rapidly from impressive resilience to outright frothiness," said ANZ Chief Economist Sharon Zollner.
New Zealand's success in virtually eliminating COVID-19 domestically helped the economy bounce back swiftly.