New Zealand's central bank raised interest rates on Thursday and signaled further rises through early 2017, taking the lead among developed economies in tightening monetary policy as it tries to quell inflation pressures in an outperforming economy.
In a widely expected move, the Reserve Bank of New Zealand lifted its official cash rate by 25 basis points to 2.75 percent, raising rates from a record low 2.5 percent.
"Inflation pressures are increasing and are expected to continue doing so over the next two years," RBNZ Governor Graeme Wheeler said in a statement. "In this environment it is important that inflation expectations remain contained. To achieve this it is necessary to raise interest rates towards a level at which they are no longer adding to demand."
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