An elderly woman shops at a supermarket in Auckland, New Zealand, Oct. 5, 2022. The Monetary Policy Committee of New Zealand's central bank increased the Official Cash Rate (OCR) to 3.5 percent from 3.0 percent on Wednesday. The current OCR is at its highest point in seven years. (Photo by Zhao Gang/Xinhua)
WELLINGTON, Oct. 5 (Xinhua) -- The Monetary Policy Committee of New Zealand's central bank increased the Official Cash Rate (OCR) to 3.5 percent from 3.0 percent on Wednesday.
The current OCR is at its highest point in seven years.
The committee agreed it remains appropriate to continue to tighten monetary conditions at pace to maintain price stability and contribute to maximum sustainable employment.
"Core consumer price inflation is too high and labor resources are scarce," said a committee statement.
Global consumer price pressures remain heightened. The global demand for goods and services is exceeding supply capacity, putting upward pressure on prices, it said.
In New Zealand, the level of domestic spending has remained resilient to date, in the face of slowing global growth and higher domestic interest rates. Employment levels are high, and household balance sheets remain resilient despite the fall in house prices, according to the committee.
New Zealand's productive capacity is still being constrained by labor shortages and wage pressures are heightened. Overall, spending continues to outstrip the capacity to supply goods and services, with a range of indicators continuing to highlight broad-based pricing pressures, it said.
Committee members agreed that monetary conditions needed to continue to tighten until they are confident there is sufficient restraint on spending to bring inflation back within its 1-3 percent per annum target range.
The OCR has been raised from 0.25 percent to 3 percent through seven consecutive hikes over the past year, with the past five hikes of 50 basis points being the most aggressive tightening, analysts said. ■
A man works at a construction site in Auckland, New Zealand, Oct. 5, 2022. The Monetary Policy Committee of New Zealand's central bank increased the Official Cash Rate (OCR) to 3.5 percent from 3.0 percent on Wednesday. The current OCR is at its highest point in seven years. (Photo by Zhao Gang/Xinhua)
A car enters a gas station in Auckland, New Zealand, Oct. 5, 2022. The Monetary Policy Committee of New Zealand's central bank increased the Official Cash Rate (OCR) to 3.5 percent from 3.0 percent on Wednesday. The current OCR is at its highest point in seven years. (Photo by Zhao Gang/Xinhua)
A man works at a construction site in Auckland, New Zealand, Oct. 5, 2022. The Monetary Policy Committee of New Zealand's central bank increased the Official Cash Rate (OCR) to 3.5 percent from 3.0 percent on Wednesday. The current OCR is at its highest point in seven years. (Photo by Zhao Gang/Xinhua)