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New Zealand's central bank raises interest rates to 1.5%

Hefty hike of 50 basis points goes up against rising inflation expectations

Central bank Gov. Adrian Orr speaks to the media in Wellington, New Zealand, in 2019. The bank on April 13 announced its biggest rate increase in more than 20 years.   © AP

WELLINGTON (Reuters) -- The Reserve Bank of New Zealand raised interest rates by a hefty 50 basis points to 1.5% on Wednesday, its fourth hike in a row as it seeks to reduce the second-round effects of sharply rising inflation.

All 21 economists in a Reuters poll had expected the RBNZ to hike the official cash rate, but only six had forecast a 50 basis-point move. The rest had expected a 25 basis point increase, while financial markets were fully priced for the larger hike.

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