Hawkish Reserve Bank raises rates
Monday 14 June 2004
Reserve Bank governor Alan Bollard has raised interest rates, as expected, citing the economy’s strong growth over an extended period, and flagged that further rate hikes are likely.
By The LandlordThe central bank has been expecting growth to slow due to factors such as the high New Zealand dollar and declining population growth.
"But activity has continued to prove stronger than expected, and stretched productive resources have caused inflation pressures to increase across a range of industries," Bollard said on announcing his decision to raise the official cash rate (OCR) from 5.5% to 5.75%.
The decision was unanimously anticipated by economists, a contrast to the central banks’ previous decisions this year which have been viewed as finely balanced.
In the wholesale interest rate market following the announcement, the 90-day bank bills, from which floating mortgage rates are priced, rose from 5.99% to 6.04%.
Read More - Opens in a new window
Commenting is closed
There’s been a rallying of the market with the latest REINZ data showing both sales volumes and median house prices noticeably up with the onset of Spring.
There’s no sign of a slow-down in Wellington’s property prices with Trade Me Property’s latest data showing that asking prices continue to rise solidly.
Auckland-based commercial property disrupter, Jasper, has raised $2.3 million in seed funding following investment from European asset manager M7 Real Estate.