The Monetary Policy Committee of New Zealand agreed to raise the Official Cash Rate (OCR) to 0.75 percent on Wednesday. According to reports, the committee concluded that continuing to reduce monetary stimulus is necessary in order to maintain price stability and encourage maximum sustainable employment.
"Global economic activity is continuing to rise, aided by accommodative monetary and fiscal policy settings, as well as the loosening of Covid-19 health restrictions. However, because to the increased uncertainty produced by the persistent infection, the rate of global economic development has slowed "In a statement, the committee stated.
At a time when consumer demand is strong, global supply-chain disruptions are producing cost pressures and production difficulties. To assess the need for, and timing of, decreases in the level of monetary policy stimulus, central banks around the world must discern between temporary price increases and underlying sustained inflation pressures. As New Zealand transitions to the Covid-19 Protection Framework, the country's public health regulations are loosening.