New Zealand’s Hawkish Hold Highlights Mounting Inflation Worries

New Zealand’s central bank delivered a hawkish hold at its April policy meeting that reinforced a strong commitment to its inflation target, in a decision released hours after the US and Iran agreed to a tentative ceasefire.

As expected, the Reserve Bank’s Monetary Policy Committee kept the Official Cash Rate at 2.25% on Wednesday, saying inflation is likely to accelerate to 4.2% in the second quarter and highlighting “significant uncertainties” around that forecast. The RBNZ aims for the midpoint of a 1-3% inflation target.