By Lucy Craymer
WELLINGTON (Reuters) – New Zealand’s central bank governor said on Thursday that the benchmark interest rate needs to be higher and the country needs to enter recession to rein in rising inflation Control, which means misery for some homeowners.
“We are sorry New Zealanders are being hit by a major shock with inflation above target. As we have said before, inflation is no one’s friend and costs the economy,” Reserve Bank of New Zealand (RBNZ) Governor Adrian Orr told a parliamentary committee. The basis points to near 11 year highs of 4.25% as it struggles to contain inflation near three-decade highs. It also said it expected a year-long recession starting at 2023 as it pushed rates higher.
“The problem here and there is the pain of inflation and that’s what we’re trying to fix,” Orr said. %.
“Our biggest surprise since August has been the persistence of global inflation … Domestically, we’re seeing price pressures everywhere,” Orr said.
He added that the central bank committee realizes that more and faster measures need to be taken to break the vicious circle.
At this point our monetary policy is tightening,” he said. Percentage since peak in November 2021.
“Some households are already experiencing financial constraints and this is where banking and fiscal policy will need to prove,” Orr said.
