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N.Z. central bank hikes rates 0.5% despite cyclone's economic blow

More increases may follow new 14-year high due to inflation

New Zealanders fill sandbags at a public collection point in preparation for the arrival of Cyclone Gabrielle in Auckland on Feb. 12. The central bank has raised interest rates to a more than 14-year high despite the billions of dollars in damage the economy faces after the storm. (AAP via Reuters)

WELLINGTON (Reuters) -- New Zealand's central bank raised interest rates by 50 basis points (0.5%) to a more than 14-year high of 4.75% on Wednesday and said it expects to keep tightening further, as inflation remains too high, a hawkish signal that sent the local dollar surging.

The Reserve Bank of New Zealand (RBNZ) said it was too early to assess the policy implications of the recent devastating cyclone and floods in the country's North Island and expects to look past the short-term price pressures stemming from the weather events.

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