New Zealand raises its cash rate to 2.75% and says another increase may follow

The Reserve Bank of New Zealand raised its official cash rate by 25 basis points to 2.75 percent Wednesday, its second consecutive increase.

Inflation is still the reason. The Bank said annual inflation reached 4.1 percent in the June quarter as the Middle East conflict lifted fuel prices, and it expects inflation to remain above 3 percent for the rest of 2026.

The target range is 1 to 3 percent. The Bank expects inflation to return to that range next year and to reach 2 percent soon after.

It left the door open. The statement says another OCR increase may be needed this year, while describing an economy that was recovering before higher fuel costs reduced household spending power.