New Zealand’s central bank hikes key interest rate to 5.25%

By NICK PERRY
Associated Press

WELLINGTON, New Zealand (AP) — New Zealand’s central bank surprised economists on Wednesday by imposing an aggressive half-point rate rise to bring its benchmark interest rate to 5.25%. It was the Reserve Bank of New Zealand’s 11th straight rate hike as it tries to cool inflation, which is running at 7.2%, far above the bank’s target level of around 2%. It brings the key rate to its highest level since the Global Financial Crisis in 2008. Most economists had expected the bank to impose a more modest quarter-point rise after the nation’s economy contracted in the December quarter and a destructive cyclone hit in February.