New Zealand central bank raises rates

People enter the Reserve Bank of New Zealand (RBNZ) headquarters in Wellington, New Zealand.
Mark Coote | Bloomberg | Getty Images

New Zealand's central bank raised rates for a third consecutive review on Thursday, and said further rises would be needed to contain inflation in the booming economy, although a strong currency and data would dictate how far and how fast it tightens policy.

The official cash rate was raised by 25 basis points to 3.25 percent, as expected, with the Reserve Bank of New Zealand saying strong housing and building markets were boosting inflation pressures, and surging immigration was also stoking local demand.

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It marginally lowered its forecasts of wholesale interest rates, and also scaled back inflation and growth expectations, but gave little hint that it is set to pause its planned rate tightening.

Sixteen of 17 economists polled by Reuters had expected a rise, in line with financial markets pricing.