News
Inflation · Interest Rates · Oil Prices · RBNZ
The Reserve Bank of New Zealand (RBNZ) indicated it will raise interest rates if the ongoing Iran war causes oil prices to surge persistently, leading to a sustained rise in inflation, according to Governor Anna Breman on Tuesday.
RBNZ Governor Anna Breman stated the central bank will "look through" a short-term inflation increase, as tightening monetary policy in such a scenario would only hinder economic growth without significantly improving immediate inflation outcomes. Breman emphasized the situation changes if the disruption is longer-lasting, requiring monetary policy to prevent a temporary inflation spike from becoming enduring inflationary pressures.
The Committee will remain vigilant to this risk. Central banks globally are currently navigating the challenge of responding to elevated oil prices and the potential for both prolonged inflation and weaker economic growth if the conflict in Iran extends.
RBNZ warns rate hikes if inflation persists(current)
