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New Zealand raises interest rates 50 basis points to 3.5%

Central bank nixed bigger push, but move sends benchmark to 7-year high

The New Zealand dollar rose 0.9% to $0.5782 after the country's central bank lifted interest rates for the eighth time in 12 months on Oct. 5.   © Reuters

SYDNEY (Reuters) -- New Zealand's central bank on Wednesday lifted interest rates to a seven-year high and promised more pain to come as it struggles to cool red-hot inflation in an over-stretched economy.

The Reserve Bank of New Zealand's (RBNZ) policy committee raised its official cash rate by 50 basis points to 3.5%, the fifth such outsized move and the eighth hike in 12 months.

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