New Zealand’s central bank raised its key interest rate Wednesday by an unexpectedly high 50 basis points. The Reserve Bank of New Zealand raised its benchmark cash rate from 4.75% to 5.25%. Experts had been expecting a 25-basis-point hike. “Inflation is still too high and persistent, and employment is beyond its maximum sustainable level,” the central bank said in a statement, also citing lower-than-expected economic activity and higher prices for some goods and services following severe storms that hit the nation in February in its decision. New Zealand’s dollar NZDUSD gained against the U.S. dollar following the hike. The RBNZ’s move came a day after the Reserve Bank of Australia paused its campaign of interest-rate hikes, keeping its cash rate at 3.60% following 10 straight increases over the past year. RBA Gov. Philip Lowe said Wednesday that despite the pause, the central bank has not ruled out more rate hikes.
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